T 


UNIVERSITY 

OF  CALIFORNIA 

LOS  ANGELES 


SCHOOL  OF  LAW 
LIBRARY 


V^. 


A- 


TREATISE; 


Private  Corporations 


The  effect  of  the  clause  of  the  Constitution  of  the   UNITED 
STATES  that  forbids  a  state  to  pass  a  "  Law  impair- 
ing  the    obligation   of   Contracts,"   upon    the 
police   control   of  a    state    over    PRI- 
VATE CORPORATIONS. 


By  WM.  WHARTON  SMITH. 

PHILADELPHIA  BAR. 


PHILADELPHIA  : 

R.EES,   WELSH   &  CO. 

Law  Publishers, 

19  South  Ninth  Street, 

1889. 


Entered  according  to  Act  of  Congress,  in  the  year  1889,  by  Reese,  Wemh  &  Co. 
in  the  oflRce  of  the  Librarian  of  Conarress,  at  Washington,  D.  C. 


T 


CONTENTS. 


Chapter.  Page. 

I.    General  nature  of  Police  Power 1  to   7 

II.  Article  I,  Section  10,  of  the  Constitution  of  the 
United  States,  the  decision  in  the  Dartmouth 
College  case,  and  the  questions  following  that 
decision 7  to  10 

III.  Principle  of  Providence  Bank  v.  Billings  ....   11  to  12 

IV.  The  remedy  exercised  by,  or  against  a  corporation 

is  no  part  of  its  franchise,  and  is  within  legisla- 
tive control 13  to  18 

V.    Police  control  over  railroad  companies 18  to  39 

VI.     Control  of  charges  of   corporations  other  than 

railroads 39  to  40 

VII.    Kegulations  over  corporations  not  demanded  by 

public  safety 40  to  43 

VIII.  A  State  cannot  violate  an  express  provision 
contained  in  the  charter  of  a  corporation,  pro- 
vided same  be  constitutional 43  to  47 

IX.    Cases  illustrating  the  extreme  exercise  of  Police 

Power 47  to  56 

X.     Limitation  on  Police  Power,  even  in  these  cases  .   56  to  57 
XC.    The  effect  of    a  reservation   to  a  State   of   the 

power  to  alter,  amend  or  repeal  a  charter  .    .    .   57  to  63 
XII.     Conclusion 63  to  66 


756388 


TABLK  CASKS. 


B 


Bailey  v.  P.  W.  &  B.  R.  R.  (Jo., 

Bank  Commissioners  v.  Farmers  and  Mechanics  Bank, 

Bank  of  Columbia  v.  Okely, 

Bank  of  Ohio  v.  Knopp, 

Barnett  w.  R.  R.  Co., 

Bartmyer  v.  Iowa, •        . 

Beer  Co.  v.  Massachusetts 

Binghanipton  Bridge  Co.,       ...... 

Boston  &  Lowell  R.  R.  Co.  v.  Salem  &  Lowell  R.  R.  Co., 
Boston,  Concord  &  Montreal  R.  R.  Co.  v.  The  State, 

Boyd  V.  Alabama,       .         .         • 

Bridge  Proprietors  v.  Hoboken,     ..... 
Broadbeut  v.  T.  S.  «fc  A.  Association,       .         .        .         . 

BrowQ  ■».  Bank, 

Bryant  «.  Bank, ,         . 

Butchers  Union  Slaughter  House,  etc.,  v.  Crescent  City, 


etc.. 


Page. 
87 
26 
25 
58 
32 
52 
52.  61 
47,  G3 
50 
84 
55 
49 
55 
27 
37 
55,  68 


Central  Bridge  Co.  v.  Lowell,         .... 
Charles  River  Bridge  Co.  v.  Warren  Bridge,     . 
Chicago  «&  Alton  R.  R.  Co,  «.  The  People,     . 
Chicago  &  N.  W.  R.  R.  Co.  v.  Dey, 
Chicago  &J«r.  W.  R.  R.  Co.  v.  Baine, 
Chicago,  Burlington  &  Quincy  R.  R.  Co.  v.  Iowa, 
Coates  ®.  Mayor,  etc.,  of  .Nfew  York,     . 
Commissioners  v.  Holyoke  Co.,         , 
Commonwealth  v.  Alger,        ..... 
Commonwealth  v.  Cochituate  Bank, 
Commonwealth  v.  Essex,         ..... 
Commonwealth  ■».  New  Bedford  Bridge  Co.,    . 
Commonwealth  v.  Pennsylvania  Canal  Co.,     . 

Corwin  v.  N.  Y.  &  E.  R.  R.  Co 

Crawford  etalw.  Bank  of  Mobile,     . 

D 

Dartmouth  College  v.  Woodward, 

Delaware,  Lackawana  &  Western  R.  R.  ».  East  Orange, 
Detroit  z'.  Detroit  &  Howell  Plank  Road  Co., 
Duncan  v.  Pennsylvania  R.  R.  Co.,       .... 

13 


49 
24 
28 
41 
32 
.  38,  42 
20,  50,  61 
46 
18 
28 
46,  59,  60 
46 
46 
31 
28 


21 

35 

43,  60 

37 


14 


Page. 

Erie,  City  of,  1?.  Erie  Canal  Co., 45 

F 

Fertilizing  Co.  v.  Hyde  Park, 21,  53 

Frankford  &  Philadelphia  P.  R.  W.  Co.  v.  Philadelphia,         .  47 

G 

Gibbons  v.  Ogden, 19 

Gorman  v.  Pacific  R.  R.  Co., 31,  34 

Go  wen  ?).  Penobscot  R.  R.  Co., 28 

Gi  anger  Cases, 40 

H 

Hall  V.  Lawrence, 20 

Hockett  V.  State,         .........  45 

Holyoke  Co.  v.  Lyman,           .......  46,  60 

Home  for  the  Friendless  v.  Rouse, 58 

I 

Illinois  Central  R.  R.  Co.  v.  Arnold, 31 

I.,  P.  &  C.  R.  R.  Co.  V.  Marshall, 32 

Iron  R.  R.  Co.  v.  Lawrence  Furnace  Co.,       ....  42 

K 

Kansas  Pacific  R.  R.  Co.  v.  Mower, 31 

Kincaid's  Appeal, 52 

I. 

Lakeview  t).  Rose  Hill  Cemetery, 52 

Laurel  Fork  &  Sand  Hill  R.  R.  Co.  v.  W.  Va.  Transportation 

Co.,             41 

Lemon  v.  Railroad  Co., 32 

Licenses  Cases,       .........  19 

L.  &  N.  R.  R.  Co.  V.  Burke, 32 

IMcElrath  v.  Pittsburg  &  Steubenville  R.  R.  Co.,         .         .  28 

Miller  v.  R.  R.  Co., 35,  60 

Missouri  Pacific  R.  R.  Co.  v.  Humes, 32,  33 

MonoDgaljela  Navigation  Co.  v.  Coon,          .         .        ,         .  37,  61 

Moore  v.  State, 55 

Mugler  V.  Kansas, 19,  53 

Munn  V.  Illinois, 39 

New  Albany  &  Salem  R.  R.  Co.  v.  Maiden,           ...  31,  32 

New  Alb  my  &  Salem  R.  R.  Co.  v.  Tilton,        ....  34 

New  Orleans  v.  Houston, 57 


15 


Page 
New  Orleans  Gas  Co.  v.  Louisiana  Light  Co.,  .         .     20,  50,  50,  63 

New  Orleans  Water  Works  Co.  v.  Rivers,        ....  50 

New  York,  City  of,  v.  Milu, 20 

North  Eastern  and  South  Western  R,  R.  Co.,  ex  parte,  .  25 


Ohio  &  Mississippi  R.  R.  Co.  v.  Lackey, 


35 


Parker  v.  Metropolitan  R.  R.  Co.,     . 

Peik  V.  Chicago  &  Northwestern  R.  R,  Co. 

Pennsylvania  R.  R.  Co.,  v.  Duncan, 

Pennsylvania  R.  R.  Co.,  v.  Riblet, 

People,  The,  v.  Jackson  &  Michij^an  P.  R.  Co., 

People  V.  Boston  &  Albany  R.  R.  Co., 

Pingry  v.  Washburn, 

Powell  V.  Sammons,      ..... 

Prigg  V.  Pennsylvania, 

Providence  Bank  v.  Billings  &  Pitman,       .         ,         .         . 

R 

Railroad  Commission  Cases,     ...... 

Railroad  Commissioners  v.  Yazoo  &  Mississippi  R.  R.  Co., 

Railroad  Co.  -o.  Baty, 

Raihoad  Co.  v.  Hecht, 

Railroad  Co.  v.  Maine,         ....... 

Railroad  Co.  v.  Maryland, 

Railroad    Co.  v.  Payne, 

Railroad  Co. «.  Peoples,     ....  ... 

Railroad   Co.  v.    Whiteneck,         ..... 

Ruggles  V.  Illinois, 

S 

Shepard  v.  Buffalo,  New  Yoik  &  Erie  R.  R.  Co.,     . 

Shields    v.    Ohio, 

Sinking  Fund  Cases, . 

Slaughter  House  Cases,     ,.-.... 

Sloan  V.  Pacific  R.  R.  Co., 

Southwestern  R.  R.  Co.  v.  Paiilk, 

Spring  Valley  Water   Works  v.  Schottler, 

Stanley  v.  Stanley 

State   V.   Bosworth, 

State  V.  Columbus  Gas  Light  &  Coke  Co., 

State  V,  Noyes, 

State  V.  Richmond  &  Danville  R.  R.  Co., 
Stone  V.  Fai  mers'  Loan  &  Trust    Co., 


Ti 


45 
40 

fil 
33 
28 
31 
43 
27 
19 
24,  47,  58 


43 
42 

32 

28 
60 
38 
32 
32 
32 
40,  42,  59 


31,  32 


59 

58,  59 

19,20,55 

42 

34 


28 
27 
45 
35 
35 
36,  40,  41,  43 


16 

Page. 

Stone  7).  Illinois  Central  R.  R.  Co., 40 

Stone   V.  Mississippi,     ........  54,  61 

Stone  V.  N.  O.  &  N.  R.  R.  Co., 40 

Stone  ».  Wisconsin^ 40 


Thorpe  v.  Rutland  &   Burlington   R.  R.  Co.,         .         .         .29,  33 
Toledo,  Wabash  &  Western  R.  R.  Co.  ©.Jacksonville,      .  35 

Toniilson  v.  Jessups, 58 

Tredway  v.  R.  R.  Co., 


^W 


32 


Ward  V.  Farwell, 26 

Washington  Bridge  Co.  ®.  Connecticut,      ....  46 

West  River  Bridge  Co.  v.  Dix, 49 

White's  Creek  Turnpike  Co.  •».  Davidson  County,     .        .  44 


CHAPTER  I. 

There  is  necessarily  inherent  in  every  government  the 
power  to  regulate  to  a  greater  or  less  degree  the  actions  of 
its  subjects,  and  the  uses  made  by  them  of  their  property. 
This  power  is  the  very  essence  of  government,  and  in  its 
exercise  the  State  can,  not  only  forbid  its  subjects  to  do 
those  things  that  are  intrinsically  wrong,  mala  in  se,  such 
as  perjury  or  theft,  but  it  can  go  much  further  and  forbid 
its  subjects  to  do  many  things,  which,  in  themselves 
harmless,  yet  become  wrongful,  in  consequence  of  the 
mutual  rights  and  obligations  of  its  subjects.  Thus,  any 
man  in  the  United  States  can  build  and  operate  a  slaughter- 
house out  in  the  countr}'',  where  it  disturbs  no  one,^  but 
if  he  attempts  to  build  and  operate  a  slaughter-house  in 
the  heart  of  a  populace  city,  where  his  neighbors  are  dis- 
tressed and  their  lives  rendered  uncomfortable  by  the 
ofiFensive  odors,  etc.,  arising  from  the  slaughter-house,  the 
State  government  can  forbid  him  to  longer  carry  on  the 
business. 

The  extent  of  this  general  power  of  the  State  to  regulate 
individuals  and  property  within  its  limits,  varies  greatly 
according  to  the  form  of  government.  In  an  absolute 
monarchy,  the  only  limit  to  it  is  the  will  of  the  monarch  ; 
while  in  the  United  States,  numerous  restrictions  are 
placed  on  this  power  of  the  individual  States,  both  by  the 
Constitution  of  the  United  States  and  the  Constitutions  of 
the  dififerent  States. 

The  particular  branch  of  this  general  power  which  for- 
bids a  man  to  do  that  which,  harmless  in  itself,  yet 
becomes  a  wrong  in  consequence  of  the  mutual  rights  and 
obligations  existing  between  himself  and  his  fellow  citi- 

A  There  may  perhaps  be  exceptions  to  this  statement,  but  the  rule 
as  stated  above  is  the  <ienpral  one. 


zens;  which  is  based  on  the  maxim  aic  utere  tuo  ut  alienum 
non  laedas,  is  called  the  police  power.  It  is  not  easy  to 
define  or  set  limits  to  this  power.  Blackstone^  speaks  of 
offences  against  the  public  police  or  economy  as  one 
branch  of  offences  against  the  commonwealth.  "  By  public 
police  and  economy  I  mean,"  he  says,  "  the  due  regula- 
tion and  domestic  order  of  the  kingdom,  whereby  the 
individuals  of  the  State,  like  members  of  a  well  governed 
family,  are  bound  to  conform  their  general  behaviour  to 
the  rules  of  propriety,  good  neighborhood,  and  good 
manners,  and  to  be  decent,  industrious,  and  inoffensive 
in  their  respective  stations."  In  a  Massachusetts  case,^ 
Chief  Justice  Shaw  gives  a  very  good  explanation  of  this 
power.  A  statute  of  Massachusetts,  limiting  the  distance 
to  which  wharves  or  piers  could  be  extended  over  the  tide- 
water of  the  Commonwealth,  was  before  the  Court  in  this 
case,  and  in  regard  to  the  power  which  the  State  had  to 
pass  sucli  a  law,  the  Judge  said  (p.  84) :  '*  We  think  it  a 
settled  principle,  growing  out  of  the  nature  of  well  ordered 
civil  society,  that  every  holder  of  property,  however  abso- 
lute and  unqualified  may  be  his  title,  holds  it  under  the 
implied  liability  that  his  use  of  it  may  be  so  regulated 
that  it  shall  not  be  injurious  to  the  equal  enjoyment  of 
others  having  an  equal  right  to  the  enjoyment  of  their 
property,  nor  injurious  to  the  rights  of  the  community. 
There  are  many  cases  in  which  such  a  power  "  (the  gov- 
erning and  controlling  power)  "  is  exercised  by  all  well 
governed  governments,  and  where  its  fitness  is  so  obvious, 
that  all  well  regulated  minds  will  regard  it  as  reasonable. 
Such  are  the  laws  to  prohibit  the  use  of  warehouses  for 
the  storage  of  gunpowder  near  habitations  or  high- 
ways ;  to  restrain  the  height  to  which  wooden  buildings 
may  be  erected  in  populous  neighborhoods,  and  require 
them  to  be  covered  with  slate  or  other  incombustible 
material ;  to  prohibit  buildings  from  being  used  for  hos- 
pitals for  contageous  diseases,  or  for  the  carrying  on  of 

1  Bk.  IV.  p.  163. 

-2  C  wealth  V,  Alger,  7  Cush.  53. 


19 

obnoxious  or  offensive  trades ;  to  })rohibit  the  raising  of 
a  dam,  and  causing  stagnant  water  to  spread  over  mead- 
ows, near  inhabited  villages,  thereby  raising  noxious 
exhalations  injurious  to  health  and  life.  Nor  does  the 
prohibition  of  such  noxious  use  of  propert}^,  a  prohibition 
imposed  because  such  use  would  be  injurious  to  the  pub- 
lic, although  it  may  diminish  the  profits  of  the  owner, 
make  it  an  appropriation  to  public  use,  so  as  to  entitle  the 
owner  to  compensation." 

AVliile  this  definition  of  the  police  power  of  a  State  is 
not  broad  enough  to  cover  all  the  cases  that  have  arisen 
since  it  was  decided,  it  yet  shows  with  great  clearness  and 
force  the  foundation  of  this  power,  and  gives  many 
examples  of  its  exercise.  It  was  held  that  the  States,  in 
the  exercise  of  their  general  police  power,  possess  full 
jurisdiction  to  arrest  and  restrain  runaway  slaves,  and 
remove  from  their  borders,  and  otherwise  to  secure  them- 
selves against  their  depradation  and  evil  example,  as  they 
certainly  may  do  in  the  case  of  idlers,  vagabonds  and 
paupers.  (Such  State  regulations  must  not  interfere  with 
the  Constitution  of  the  United  States.;^  Again,  the  State 
Courts  for  the  most  part  have  upheld  statutes,  passed  by 
the  different  States  in  the  exercise  of  their  police  power, 
regulating  or  prohibiting  the  sale  and  manufacture  of 
intoxicating  liquors,  and  the  Supreme  Court  of  the  United 
States  have  upheld  the  State  courts  in  a  long  line  of  deci- 
sions from  the  License  Cases  to  Mugler  vs.  Kansas.^  In 
this  last  case,  an  Act  of  Kansas  forbidding  absolutely  the 
sale  and  manufacture  of  intoxicating  liquors  except  for 
medical  and  scientific  purposes,  was  held  to  apply  to 
liquor  made  before  as  well  as  that  made  after  the  act  was 
passed.  The  passage  of  quarantine  and  pilot  laws  is 
another  valid  exercise  of  this  power,'  and  in  the  Slaughter- 

1  From  tbe  opinion  of  Story  J.  in  Prigg  v.  Penna.,  ]fi  Peters  510. 

2  5  How.,  504. 

s  S.  C.  of  U.  S.,  Oct.  terra,  1887,  No.  19. 
4  Gibbons  v.  Ogden,  9  Wheat.  4,  205. 


20 

House  Cases^  it  was  held  that  a  statute  creating  a  monopoly 
in  the  butchering  trade  over  a  large  territory  was  consti- 
tutional, such  a  regulation  being  required  by  the  public 
health  in  the  opinion  of  the  Legislature  of  Louisiana.  A 
statute  of  New  York  requiring  the  masters  of  vessels  to 
give  to  the  Mayor  of  the  City  of  New  York,  on  oath,  a 
catalogue  of  the  passengers  landed  by  him,  was  held  to  be 
a  valid  exercise  of  the  police  power."  In  a  case  of  over- 
whelming necessity,  the  State  can  destroy  a  private  build- 
ing without  compensating  its  owner  for  his  loss." 

I  have  tried  to  explain  briefly  what  the  police  power 
is,  and  upon  what  it  is  based.  The  fact  that  "  every  right, 
from  an  absolute  ownership  in  property  down  to  a  mere 
easement,  is  purchased  and  holden  subject  to  the  restric- 
tion, that  it  shall  be  so  exercised  as  not  to  injure  others"* 
is  the  foundation  of  it.  "  Upon  it  depends  the  security  of 
social  order,  the  life  and  health  of  the  citizen,  the  comfort 
of  an  existence  in  a  thickly  populated  community,  the 
enjoyment  of  private  and  social  life,  and  the  beneficial 
use  of  property."^  The  police  power  has,  however,  a  wider 
signification  than  that  which  is  based  solely  on  the  maxim 
sic  utere  tuo  ut  alienum  non  laedas,  awd,  "as  sometimes 
defined,  it  includes  all  legislation  and  almost  every  func- 
tion of  civil  government.""  In  the  exercise  of  it,  property 
is  never  destroyed  or  taken  from  its  owner  except  in  a 
case  of  overwhelming  necessity,  but  it  is  often  greatly 
lessened  in  value.  Its  owner,  however,  is  not  entitled  to 
any  compensation  for  this  loss,  for  his  individual  rights 
must  at  times  yield  to  the  rights  of  the  community  in 
which  he  lives. 

1  16  Wall.  30. 

2  City  of  N.  Y.  V.  Miln,  11  Peters,  102. 

»  Hall  V.  Lawrence,  1  Zabriskie,  714,  733. 

*  From  opinion  of  the  Court  in  Coates  v.  Mayor,  etc.,  of  N.  Y.,  7 
Cowen,  585. 

*  Opinion  of  .Court  by  Miller  J.  in  Slaughter-House  Cases,  16  Wall., 
36,  62. 

*  Opinion  of  Court  by  Harlan,  J.  in  New  Orleans  Gas  Co.  v.  La. 
Light  Co.,  115  U.  S.  650,  651. 


21 

The  application  of  this  power  is  universal  and  unlim- 
ited except  as  restricted  by  the  Constitution  of  the  United 
States  and  the  Constitutions  of  the  different  States.  "It 
belonged  to  the  States  when  the  Federal  Constitution  was 
adopted.  They  did  not  surrender  it,  and  they  all  have  it 
now.'"  Private  individuals  and  corporations  are  alike 
subject  to  its  exercise. 

CHAPTER  II. 

But  there  is  a  certain  difference  between  a  private  in- 
dividual and  a  corporation,  which  brings  the  latter 
within  the  protection  of  one  of  the  clauses  of  the  Consti- 
tution of  the  United  States  in  many  cases  where  it  does 
not  apply  to  natural  persons.  The  clause  of  the  Constitu- 
tion in  question  is  the  one  (Article  I,  Section  10)  which  for- 
bids the  States  to  pass  a  "law  impairing  the  obligation  of 
contracts."  It  was  decided  long  ago  (1819)  in  the  case  of 
Dartmouth  College  vs.  Woodward"  that  the  charter  of  a 
private  corporation  is  a  contract  within  the  meaning  of 
this  clause  of  the  Constitution.  In  this  case  the  Supreme 
Court  of  the  United  States  held  in  regard  to  the  charter 
of  Dartmouth  College  :  "It  is  a  contract  made  on  a  valu- 
able consideration.  It  is  a  contract  for  the  security  and 
disposition  of  property.  It  is  a  contract,  on  the  faith  of 
which,  real  and  personal  estate  has  been  conveyed  to  the 
corporation  *  *  *  is  a  contract,  the  obligation  of 
which  cannot  be  impaired,  without  violating  the  Consti- 
tution of  the  United  States. " 

It  having  been  decided  that  the  charter  of  a  corpora- 
tion is  a  contract  within  the  meaning  of  this  clause  of  the 
Constitution,  it  follows  that  state  laws  which  impose 
fresh  burdens  upon  corporations  already  in  existence, 
which  deprive  them  of  privileges  possessed  under  their 
charters,  which  interfere  with  them  in  the  exercise  of 
their  franchises,  which,  in  fine,  alter  the  terms  of  the 

^  Opinion  of  Court  in  Fertilizing  Co.  v.  Hyde  Park  97  U.  S.  Go9. 
2  4  Wheaton,  518. 


22 

charter  in  any  way,  impair  the  obligation  of  the  charter 
contract,  and  are  forbidden  by  the  Constitution. 

This  is  the  broad,  general  rule ;  but  the  questions  soon 
arose  and  have  continued  to  arise :  Is  this  contract  be- 
tween the  State  and  the  corporation  absolutely  inviola- 
ble? Can  the  State  under  no  circumstances  pass  a  law 
which  modifies  the  charter  of  a  corporation  or  perhaps 
repeals  it  altogether?  If  the  State  can  sometimes  alter 
or  repeal  a  charter,  what  circumstances  justify  such  ac- 
tion on  its  part?  When  such  questions  have  arisen,  the 
members  of  the  corporation  point  to  their  charter  and 
say:  The  Supreme  Court  of  the  United  States  said  long 
ago  that  our  charter  is  a  contract  within  the  clause  of  the 
Constitution  forbidding  a  State  to  pass  a  law  impairing 
the  obligations  of  contracts.  On  the  strength  of  this  we 
have  spent  our  money  and  given  our  time  for  the  attain- 
ment of  certain  legitimate  purposes.  The  State  cannot 
now  pass  a  law  forbidding  us  to  carry  out  the  purposes 
for  which  we  were  incorporated,  nor  can  it  impose  restric- 
tions upon  us,  or  place  burdens  upon  us  which  our 
charter  does  not  provide  for.  If  our  charter  allows  us  to 
use  our  property  in  certain  ways  and  for  certain  pur- 
poses, the  State  cannot  forbid  us  so  to  do.  "When  a  gov- 
ernment enters  into  a  contract  with  an  individual,  it  de- 
poses, as  to  the  matter  of  the  contract,  its  constitutional 
authority,  and  exchanges  the  character  of  legislator 
for  that  of  a  moral  agent,  with  the  same  rights  and  obli- 
gations as  an  individual.  Its  promises  may  justly  be 
considered  as  excepted  out  of  its  power  to  legislate,  un- 
less in  aid  of  them."^ 

The  other  side  says  in  reply:  There  is  no  essential  rea- 
son why  general  laws  regulating  the  use  of  property,  etc., 
should  not  apply  to  corporations  as  well  as  natural  per- 
sons. "To  attain  its  legitimate  object,  it  (a  corporation) 
may  deal  precisely  as  an  individual  who  seeks  to  accom- 
plish the  same  end."^     Why  should  it  not  be  subject  to 

1  3  Hamilton's  Woiks,  518,  519. 

2  2  Kents  Com.  278,  N.  c. 


23 

precisely  the  same  restrictions  in  what  it  does?  The  or- 
dinary incidents  of  a  corporation,  viz.,  to  have  perpetual 
succession,  elect  members,  sue  and  be  sued,  purchase  and 
hold  lands,  etc.,  do  not  give  the  corporation  any  quality, 
on  account  of  which  it  should  be  removed  from  legisla- 
tive control.  Laws  which  apply  to  natural  persons, 
should,  when  suitable,  apply  to  corporations. 

Neither  of  these  two  opposite  views  in  regard  to  the 
power  of  a  State  over  a  corporation  is  wholly  correct: 
that  is  neither  view  applies  to  every  case ;  nor  is  either 
one  wholly  wrong,  in  the  sense  of  applying  to  no  cases. 
'The  true  doctrine  is  one  made  up  of  these  two  opposite 
views,  modified  to  a  certain  extent,  and  so  joined 
together,  that  if,  owing  to  the  circumstances,  tlie  first 
view  does  not  apply  to  a  particular  case,  the  second  one 
will.  The  general  rule  is  undoubtedly,  as  stated  above? 
that  the  charter  of  a  corporation  is  a  contract,  and  that 
a  State  cannot  alter  or  revoke  it  without  the  consent  of 
the  corporation,  but  there  is  a  certain  class  of  legislation 
which  applies,  the  courts  have  held,  to  corporations  no 
less  than  to  natural  persons,  in  spite  of  the  constitutional 
prohibition.  The  legislation  which  has  been  held  to  apply 
to  corporations  is  that  which  the  States  have  passed  in 
the  exercise  of  their  police  power.  The  very  nature  of 
this  power  ;  the  fact  that  it  is  exercised  "  to  regulate  un- 
wholesome trades,  slaughter-houses,  operations  offensive 
to  the  senses  ;  "  that  it  is  for  the  protection  of  the  public 
health,  morals,  and  safety,  make  it  necessary  that  the 
government  should  never  bargain  away  this  power,  or 
part  with  it,  if  it  is  to  properly  perform  the  duties  it  owes 
to  its  citizens.  "  It  has,  therefore,  been  often  decided  in 
the  American  courts,  Federal  and  State,  that  the  State 
cannot  barter  away,  or  in  any  way  curtail  its  exercise  of 
any  of  those  powers,  which  are  essential  attributes  of 
sovereignty,  and  particularly  the  police  power,  by  which 
the  actions  of  individuals  are  so  regulated  as  not  to  injure 
others;  and  any  contract,  by  which  the  State  undertakes 


24 

to  do  this,  is  void,  and  does  not  come  within  the  consti- 
tutional protection."^ 

CHAPTER    III. 

Not  very  long  after  the  Dartmouth  College  Case,  came 
(1830)  the  case  of  The  Providence  Bank  v.  Billings  and 
Pitman".  The  action  of  the  legislature  of  Rhode  Island 
in  this  case  was  not  was  based  on  its  police  power,  not 
at  any  rate  unless  police  power  is  taken  in  its  broad- 
est sense,  but  upon  another  branch  of  its  general  power 
to  legislate,  but  the  case  is  an  important  one  for  us  to 
consider,  for  the  general  nature  of  charters  is  explained, 
and  a  fundamental  rule  in  regard  to  them  is  laid  down. 
In  1822  the  legislature  of  Rhode  Island  passed  an  act 
imposing  a  tax  on  every  bank  in  the  State  except  the 
the  bank  of  the  United  States.  The  Providence  Bank  was 
incorporated  in  1791,  nothing  being  said  in  its  charter  as 
to  taxation,  and  refused  to  pay  the  tax  imposed  by  the 
statute  of  1822,  alleging  that  the  act  which  imposed  it 
was  unconstitutional  as  applied  to  itself,  as  the  act  im- 
paired the  obligation  of  the  contract  created  by  the 
charter  of  the  corporation.  But  the  Supreme  Court  of  the 
United  States  held  the  act  constitutional,  and  Marshall, 
C.  J.  said,  "  The  great  object  of  an  incorporation  is  to  be- 
stow the  characters  and  properties  of  individuals  on  a 
collected  and  changing  body  of  men.  Any  privileges 
which  may  exempt  it  from  the  burdens  common  to  indi- 
viduals do  not  flow  necessarily  from  the  charter,  but 
must  be  expressed  in  it,  or  they  do  not  exist."  This 
principle  is  a  fundamental  one  and  should  always  be  re- 
membered in  considering  the  nature  of  the  charter  con- 
tract ;  no  less  than  the  decision  in  the  Dartmouth  College 
Case;  particularly  as  the  opinion  in  both  cases  was  deliv- 
by  the  same  Judge,  Chief  Justice  Marshall.^ 

1  Tifideinan's  book  ou  the  Limitations  to  Police  Power,  p.  580. 
^  4  Peters  514. 

*  See  also  Charles  River  Bridge  Co.  vs.  "Warren  Bridjje,  Peters 
420,  where  this  principle  w.is  again  laid  down  very  forcibly. 


25 
CHAPTER  IV. 

Bearing  in  mind  these  two  principles  ;  that  a  state  can- 
not part  with  its  police  power ;  and  that  if  a  corporation 
is  to  have  any  privilege  which  may  exempt  it  from  the 
burdens  common  to  indivduals,  such  privilege  must  be 
expressly  set  forth  in  its  charter ;  let  us  see  what  legisla- 
tive restrictions  and  regulations  of  corporations  have  been 
held  to  be  valid  by  the  courts. 

In  an  old  case,  Bank  of  Columbia  vs.  Okely,'  decided 
in  1819  the  question  whether  a  provision  in  the  charter 
of  a  bank  giving  it  a  summary  process  against  its  debtors 
was  a  part  of  its  corp  )rate  franchise  and  beyond  legisla- 
tive control.  It  was  held  that  this  provision  was  not 
part  of  the  franchise  so  as  to  be  protected  by  the  charter 
of  the  bank  and  that  the  legislature  could  repeal  or  alter 
it  at  pleasure.  "  The  forms  of  administering  justice," 
said  the  court,  "  and  the  duties  and  powers  of  courts  as 
incident  to  a  branch  of  sovereign  power,  must  ever  be 
subject  to  legislative  will,  and  the  power  over  them  is  un- 
alienable, so  as  to  bind  subsequent  legislatures."  A  very 
similar  question  came  up  in  Alabanla.  A  railroad  com- 
pany was  given,  in  its  charter,  a  summary  remedy  against 
defaulting  stockholders,  but  this  privilege  was  held  no 
part  of  its  corporate  franchise,  and  the  legislature  could 
alter  or  withdraw  it  at  pleasure.' 

These  cases  decide  that  a  remedy  a  corporation  may 
be  given  at  the  time  of  its  creation  against  those  who  deal 
with  it,  even  though  the  remedy  is  contained  in  the 
charter  of  the  corporation,  may  be  altered  without  im- 
pairing the  obligation  of  the  charter  contract. 

It  has  also  been  decided  that  new  remedies  may  be  given 
the  public  against  the  corporation  to  compel  the  latter 
to  properly  perform  its  duties.  A  statute  of  Massachu- 
setts having  this  effect  was  examined  in  Commonwealth 

1  4  Wheaton,  235. 

2  Ex  Parte  N.  E.  &  S.  W.  R.  R.  Co.,  37  Ala.  N.  S.  679. 


26 

by  the  Bank  Commissioners  vs.  President,  &c.,  of  the 
Farmers  &  Mechanics  Bank.  ^The  bank  was  founded 
in  1836  and  in  1839  a  statute  was  passed  providing  for 
the  appointment  of  certain  commissioners  who  were  to 
visit  the  banks  of  the  State,  and  ascertain  their  condition 
and  ability  to  fulfill  their  engagements  and  whether  they 
had  complied  with  the  provisions  of  law.  These  com- 
missioners were  given  great  powers,  and  if  any  bank,  in 
their  opinion,  was  insolvent,  or  in  such  a  condition  as  to 
render  its  further  progress  hazardous  to  the  public,  or  if 
it  had  exceeded  its  powers,  or  if  it  had  failed  to  comply 
with  all  the  rules,  restrictions,  and  conditions  imposed  by 
law,  they  could  apply  to  a  .Justice  of  the  Supreme  Judi- 
cial Court  to  issue  an  injunction  to  restrain  the  corpora- 
tion in  whole  or  in  part  from  further  carrying  on  its  bus- 
iness The  Justice  after  a  full  hearing,  could  make  the 
injunction  perpetual  and  appoint  a  receiver  if  it  seemed 
best  to  him.  This  statute  was  held  constitutional,  for  the 
bank  held  its  charter  upon  the  implied  condition  that  it 
should  conduct  its  business  according  to  banking  princi- 
ples and  the  rules  of  law,  and  all  this  statute  did,  was  to 
settle  on  a  way  for  •discovering  whether  the  bank  com- 
plied with  these  conditions,  and  in  case  it  had  not  done 
so,  cause  it  to  suspend  or  incur  forefeiture  as  it  would 
have  had  to  do  independently  of  this  statute. 

Illinois  passed  a  statute  similar  to  the  one  of  Massa- 
chusetts, and  the  Illinois  court  came  to  same  conclusion 
as  to  its  constitutionality  as  did  the  court  of  Massachu- 
setts. In  Ward  vs.  FarwelP  the  court  said,  "  With  con- 
stitutional limitations,  the  rights  of  all  persons,  whether 
natural  or  artificial,  are  subject  to  such  legislative  con- 
trol as  the  legislature  may  deem  necessary  for  the  gen- 
eral welfare,  and  it  is  a  fundamental  error  to  suppose  there 
is  any  difference  in  this  respect  between  the  rights  of  nat- 
ural and  artificial  persons.      They  both  stand  upon  pre- 

1  21  Pick.  542. 

2  97  111.  593. 


27 

cisely  the  same  footing.  While  personal  liberty  is  guar- 
anteed by  the  constitution  to  every  citizen,  yet,  by  disre- 
garding the  rights  of  others,  one  may  forfeit  not  only  lib- 
erty, but  even  life  itself.  So  a  corporation  by  refusing  to 
conform  to  the  laws  of  its  creation,  or  by  so  conducting  its 
business  affairs,  as  to  defeat  the  objects  and  purposes  of 
its  promoters,  and  the  design  of  the  legislature  in  creating 
it,  may  forfeit  the  right  to  further  carry  on  its  business, 
and  also  its  existence  as  an  artificial  being." 

In  these  cases  no  new  burden  was  imposed  on 
the  corporation ;  none  of  its  property  was  taken ; 
simply  a  new  remedy  was  given  to  those  with 
whom  the  corporation  dealt  to  compel  the  corporation  to 
fulfil  the  implied  conditions  on  which  it  held  its  charter. 

Some  cases  have  gone  further  than  this,  and  have  held 
statutes  constitutional  which  imposed  new  burdens  on 
the  corporation,  or  lessened  its  income,  in  order  that 
those  with  whom  the  corporation  dealt  might  have  a 
more  complete  remedy  if  the  corporation  did  not  fulfil 
the  implied  or  expressed  conditions  on  which  it  held  its 
charter.  Thus,  a  statute  of  Maine  enacted  that  any  bank, 
if  it  refused  or  delayed  payment  in  gold  or  silver  for  fif- 
teen days  of  any  bill  properly  presented,  should  be  held 
liable  to  pay  additional  damages  of  24  %  per  annum  on 
the  bill.  This  statute  was  held  valid,'  and  a  similar  stat- 
ute of  Massachusetts,  passed  in  1809,  was  also  held  validl 

Again,  the  action  of  turn-pike  commissioners,  ap- 
pointed under  a  statute,  throwing  open  the  gate  of  a  turn- 
pike company  till  the  company  repaired  its  road,  was 
held  constitutional.^ 

But  where  the  charter  of  a  plank-road  company  con- 
tained penalties  for  not  keeping  the  road  in  good  condi- 
tion,  which,   if  enforced,  would  amply  provide  for  the 

1  Bryant  t\Bank,  18  :\re.  240. 
^  Browu  V.  Bank,  8  ^lass.  445. 

^  States.  Boswortli,  13  Ver.,  403;  Contra  Powell  v.  Sanimous,  31 
Ala.  552.     The  Vermont  clGcisiou  seems  to  be  the  better  one. 


28 

safety  and  convenience  of  those  who  traveled  over  the 
road ;  a  statute  imposing  an  entire  forfeiture  of  the  fran- 
chises of  the  company  for  neglecting  to  keep  in  repair 
any  portion  of  the  road,  was  held  unconstitutional.^ 

There  is,  therefore,  a  limit  to  the  change  in  the  remedy 
that  a  State  can  impose  on  a  corporation  for  the  purpose 
of  compelling  it  to  properly  perform  its  duty.  I  suppose 
that  the  rule  in  such  a  case,  where  the  remedy  is  a  very 
severe  one,  would  be,  that  any  change  in  the  remedy, 
which  those  who  deal  with  a  corporation  may  have 
against  it,  whether  an  old  remedy  is  altered,  or  a  new 
one  given,  would  be  constitutional ;  if  such  change  was 
in  fact  necessar}^  to  compel  the  corporation  to  properly 
perform  its  duties ;  to  compel  it  to  fulfil  the  conditions, 
expressed  or  implied  on  which  its  holds  its  charter.- 

CHAPTER  V. 

A  great  deal  of  very  important  legislation  has  been 
passed  by  the  different  States  in  the  exercise  of  their 
police  power  in  connection  with  railroad  companies. 
About  the  middle  of  this  century  railroads  came  into  ex- 
tensive use,  and  it  was  soon  found  that  a  train  of  cars 
going  at  its  ordinary  rate  of  speed  was  very  dangerous, 
both  to  whoever  or  whatever  might  be  on  its  track,  and 
to  its  own  passengers,  unless  the  company  exercised 
certain  precautions  in  running  its  trains.  These  precau- 
tionary measures  were  expensive  and  the  railroad  com- 
panies were  not  inclined  to  take  them.  Many  of  the 
States  then  attempted  to  force  the  railroad  companies  to 
take  these  precautions  and  passed   laws  for  that  purpose. 

1  The  People  v.  The  Jackson  &  Michigan  P.  R.  Co.,  9  Midi.  285. 
See  also  Chicago  &  Alton  R.  R.  Co.  v.  the  People,  67  111.,  27. 

*  See  also  Crawford  et  al  v.  Bank  of  Mobile,  7  How.  279  ;  Com- 
monwealth V.  Cochituate  Bank,  3  Allen  42;  Stanley  v.  Stanley,  26 
Maine  191  ;  Railroad  Company®.  Hecht,  95  U.  S.  168;  McElrath  ■». 
Pittsburg  &  Steubenville  R.  R.  Co.,  55  Peuna.  189  ;  Gowen  v.  Penob- 
scot R.  R.  Co.,  44  Me.,  140. 


29 

The  railroad  companies  still  refused  to  take  the  precautions 
in  many  cases,andthe  constitutionality  of  the  statutes  forc- 
ing them  to  do  so  was  raised  in  the  courts  of  numerous 
States.  In  considering  these  statutes  the  ends  for  which 
the  legislatures  passed  them ;  to  wit,  the  preservation  of 
property  and  human  life  ;  should  be  kept  clearly  in  view. 

The  leading  case'on  this  subject  is  Thorpe  vs.  Rutland 
and  Burlington  R.  R.  Co.^  decided  in  1855.  A  statute 
of  Vermont,  passed  after  the  railroad  company  was 
incorporated,  compelled  each  railroad  company  to  erect 
and  maintain  fences  on  the  line  of  its  road  and  also  to 
construct  and  maintain  cattle  guards  at  all  farm  and  road 
crossings,  &c.,  "Until  such  fences  and  cattle  guards  shall 
be  duly  made,  the  corporation  and  its  agents  shall  be 
liable  for  all  damages  which  shall  be  done  by  their  agents 
or  engines  to  cattle,  horses  or  other  animals  thereon,  if 
occasioned  by  want  of  such  fences  and  cattle  guards." 
The  charter  of  the  corporation  contained  a  provision  for 
fences  but  said  nothing  about  cattle  guards,  and  the  con- 
stitutionality of  this  part  of  the  statute,  as  applied  to  rail- 
road companies  already  in  existence  was  brought  before 
the  court  and  the  court  held  the  statute  constitutional. 
The  principle  laid  down  in  Providence  Bank  vs.  Billings 
(supra)  was  applied,  and  as  the  charter  of  the  corporation 
contained  no  exemption  from  such  regulations  as  the 
state  legislature  might  see  fit  to  impose  upon  railroad 
companies  for  the  protection  of  their  passengers  and  the 
property  of  those  living  along  their  tracks,  and  as  such 
exemption  could  not  be  implied;  the  regulation  as  to  cat- 
tle guards  did  not  impair  the  contract  created  by  the 
charter  of  the  company  and  was  constitutional.  An  in- 
dividual to  whom  such  a  grant  might  have  been  made, 
would  have  been  subject  to  such  legislative  control ;  there- 
fore the  railroad  company  must  also  be  subject  to  it. 
Such  control  does  not  interfere  with  the  essential  fran- 
chise of  the  corporation.      Redfield,  C.  J.  says  in  regard 

1  27  Vermont,  140. 


30 

to  the  statute :  "  We  think  the  power  of  the  legislature 
to  control  existing  railways  in  this  respect,  maybe  found 
in  the  general  control  over  the  police  of  the  country 
which  resides  in  the  law  making  power  in  all  free  states, 
and  which  is,  by  the  fifth  article  of  the  bill  of  rights  in 
this  state,  expressly  declared  to  reside  peipetually  and 
inalienably  in  the  legislature,  which  is  perhaps  no  more 
than  the  enunciation  of  a  general  principle  applicable  to 
all  free  states,  and  which  cannot,  therefore  be  violated  so 
as  to  deprive  the  legislature  of  the  power,  even  by  ex- 
press grant  to  any  mere  public  or  private  corporation." 
As  to  the  different  regulations  with  which  the  legistature 
may  compel  the  railroad  company  to  comply,  the  court 
says:  "There  would  be  no  end  of  illustrations  on  this 
subject,  which,  in  the  detail  are  more  familiar  to  others 
han  to  us.  It  may  be  extended  to  the  supervision  of  the 
track,  tending  switches,  running  upon  the  time  of  other 
trains,  running  a  road  with  a  single  track,  using  improper 
rails,  not  using  proper  precautian  oy  way  of  safety  beams 
in  case  of  the  breaking  of  axle-trees,  the  number  of  brake- 
men  upon  a  train  with  reference  to  the  number  of  cars, 
employing  intemperate  or  incompetent  engineers  and  ser- 
vants, running  beyond  a  given  rate  of  speed,  and  a  thou- 
sand similar  things,  most  of  which  have  been  made  the 
subject  of  legislative  control  or  judicial  determination, 
and  all  of  which  might  be."  "  And  while  it  is  conceded 
the  legislature  could  not  prohibit  existing  railways,  from 
carrying  freight  or  passengers,  it  is  believed  that  beyond 
all  question,  it  may  so  regulate  these  matters  as  to  impose 
new  obligations  and  restrictions  upon  these  roads  materi- 
ally affecting  their  profits  as  by  not  allowing  them  to  run 
in  an  unsafe  condition,  as  was  held  in  the  case  of  turn- 
pikes." 

This  opinion  not  only  explains  upon  what  grounds  the 
legislature  can  impose  regulations  upon  railroad  compa- 
nies, but  it  also  gives  so  many  examples  of  what  the  Leg- 
islatures actually  have  done,  or  at  any  rate  may  do,  that 
it  seems  scarcely  necessary  to  cite  cases  illustrating  all 


81 

the  regulations  that  the  different  States  have  imposed.  A 
State  "  may  make  all  such  regulations  as  are  appropriate 
to  protect  the  lives  of  persons  carried  upon  railroads,  or 
passing  upon  highways  crossed  by  railroads."^ 

Statutes  requiring  the  railroad  companies  to  fence  their 
tracks  and  making  them  responsible  for  cattle  killed  on 
their  tracks,  when  they  have  not  complied  with  such  reg- 
ulations, have  been  held  valid  in  a  great  many  State 
courts."  The  statutes  requiring  the  railroad  companies 
to  fence  their  tracks,  make  the  companies  responsible  in 
damages  to  the  owners  of  cattle  killed  through  such  neglect, 
and  the  measure  of  damages  is  the  value  of  such  cattle 
and  in  some  States  double  their  value.  The  chief  object 
of  these  damages  or  fines  is,  perhaps,  not  to  recompense 
the  owner  of  cattle  killed  for  the  loss  which  he  has  suffer- 
ed through  the  companies'  carelessness,  for  the  company 
is  responsible  even  where  the  owner  of  cattle  is  passively 
a  wrongdoer  by  suffering  them  to  run  at  large ;'  but  it  is 
to  compel  the  railroad  company  to  exercise  "  all  reasona- 
ble care  to  insure  the  safety  of  the  passengers,  included 
in  which  is  the  adoption  of  such  means  as  will  prevent 
the  cars  from  coming  into  collision  with  animate  objects, 
involving  not  alone  the  destruction  of  such  object,  but 
most  likely  a  great  loss  of  human  life."* 

In  this  view  of  the  case,  statutes  imposing  a  penally  to 
double  the  value  of  the  cattle  killed  have  been  held  con- 

1  Opinion  of  Couit  by  Earle,  J.  iu  People  v.  Boston  and  Albany  R. 
R.  Co.,  70  N.  Y.  569. 

2  Gorman  v.  Pacific  R.  R.  Co.  26,  Mo.  441  ;  Shepard  v.  Buffalo,  New 
York  &  Erie  R.  R.  Co.,  35  N.  Y.  641 ;  Illinois  Central  R.  R.  Co.  v. 
Arnold,  47  111.  173;  Kansas  Pacific  Riilway  Co.  v.  Mower,  16  Kansas 
573.  These  are  but  a  few  of  the  cases  in  which  such  statutes  have 
been  held  valid. 

3  Corwin  v.  N.  Y.  &  E.  R.  R.  Co.,  13  N.  Y.  42. 

*  Opinion  of  Hanna,  J.  in  New  Albany  &  Salem  R.  R.  Co.  v. 
Maiden,  12  Ind.  10.  See  also  Kansas  &  Pacific  Railway  Co.  v.  Mower, 
and  cases  there  cited. 


32 

stitutional  for  the  most  part.'  On  the  otlier  hand  the 
courts  of  Indiana  and  Nebraska  have  held  this  double 
penalty  unconstitutional,'  but  as  opposed  to  the  State 
Constitutions  and  not  to  the  Constitution  of  the  United 
States. 

The  railroad  company  can  not  free  itself  from  the  duty 
of  maintaining  fences  along  its  track,  imposed  by  the 
Legislature,  by  a  covenant  with  the  owner  of  the  land 
through  which  the  track  runs,  by  which  the  latter  agrees 
to  free  the  company  from  all  liability  to  erect  fences  along 
its  road ;'  nor  by  contracts  with  the  land  owners  along  its 
route  that  they  will  make  and  keep  up  the  fences." 

Under  these  statutes  the  railroad  companies  are  required 
to  exercise  a  high  degree  of  diligence  to  keep  their  fences 
in  a  safe  condition,^  but  they  are  not  bound  to  do  impos- 
sible things,  as  to  keep  a  constant  parol,  day  and  night, 
and  "  there  must  be  proof  of  negligence  on  the  part  of  the 
agents  and  servants  of  the  company  in  charge  of  the  train 
at  the  time."  (time  of  the  accident).'^ 

But  if  the  company  has  not  complied  with  the  law  as 
to  the  construction  of  fences,  there  need  be  no  proof  of 
negligence  on  its  part  in  order  for  it  to  be  held  i  esponsi- 
ble  for  the  cattle  killed." 

In  Pennsylvania  it  seems  that  the  law  as  to  fences  is 
different  from  the  law  in  other  States,  though,  as  far  as  I 
know,   tlie    question   has   never    come  fairly  before  the 

1  Missouri  Pacific  Railway  Co.  v.  Humes,  115  U.  S.  512  ;  R.  R.  Co. 
Tj.  Peoples,  92  111.  97  ;  Bainett  v.  R.  R.  Co.  G8  Mo.  56  ;  Tredway  v.  R. 
R.  Co.  43  Iowa  527  ;  R.  R.  Co.  v.  Payue,  33  Arkansas  816. 

a  R.  R.  Co.  V.  Wliiteneck,  87  Ind.  217  ;  R.  R.  Co.  v.  B.ity,  6  Neb.  73 

■5  Shepard  z/.  R.  R.  Co.  35  New  York  641. 

*  New  Albany  «&  Salem  R.  R.  Co.  v.  Maiden,  12  lud.  10, 

5  Lemon  v.  R.  R.  Co.  32  Iowa  151. 

«  Chicago  &  N.  W.  R.  R.  Co.  v.  Baine,  55  111.  226. 

->  I.  P.  &  C.  R.  R.  Co.  v.  Marshall,  27  Ind.  300  ;  L.  &  N.  R.  R.  Co. 
V).  Burke,  6  Cold  (Tenn.)  45  ;  Redfield,  Law  of  Railways,  Chap.  XVIII, 
Sec.  5. 


33 

coiirU  An  act  of  that  State  required  railroad  companies 
in  the  county  of  Erie  to  erect  and  maintain  fences  along 
their  tracks,  except  in  certain  places,  and  provided  cer- 
tain penalties  for  allowing  the  fences  thus  required  to  be 
built  to  remain  broken  down  for  three  days.  A  supple- 
ment to  the  act  enacted  that  where  the  fences  were  de- 
stroyed by  fire,  caused  by  the  engine  of  a  railroad  com- 
pany, or  by  its  employees,  the  railroad  company  should  be 
liable  to  the  penalties  in  the  above  act. 

Under  this  supplement  Riblet  brought  an  action 
against  the  company  for  its  refusal  to  rebuild  a  fence  de- 
stroyed by  fire  communicated  by  its  engine,  and  the 
Court  held  the  company  liable.  Bat  the  opinion  was 
based  upon  the  fact  that  though  the  company  could  be 
forced  to  rebuild  the  fence  at  once  as  a  matter  of  police, 
yet  it  might  recover  the  cost  of  reparation  from  the  land- 
lord. As  to  the  part  of  the  statute  requiring  railroad  com- 
panies to  fence  their  tracks  in  the  first  place,  Sharswood 
J.,  says,  p.  106  :  "  It  may  be  conceded  that  it  would  not 
be  within  the  constitutional  power  of  the  Legislature  to 
impose  such  an  obligation  on  an}^  existing  company;  at 
all  events,  not  on  an}'  company  whose  charter  *  *  *  * 
contains  no  reservation  to  the  Legislature  of  the  right  to 
alter  or  amend  it."  Were  the  case  ever  to  come  fairly  be- 
fore the  Court,  it  is  very  probable  that  this  dictum  would 
not  be  followed,  for  in  few  instances  can  the  police  power 
<'  be  more  wisely  or  beneficially  exercised  than  in  com- 
pelling railroad  corporations  to  inclose  their  tracks  with 
fences  having  gates  at  crossings,  and  cattle  guards."- 

Statutes  which  thus  impose  regulations  on  railroad 
companies  for  the  purpose  of  making  the  running  of 
trains  more  safe,  apply  to  companies  in  whose  charters 
there  is  no  provision  for  such  regulation' ;  to  those  over 

1  Penna.  R.  R.  Co.  v.  Riblet,  66  Pa.  164. 

^  Opinion  of  Court  by  Field.  J.,  iu  Missouri  Pacific  Railway  Co.  v. 
Humes,  115  U.  S.  513,  522. 

^  Thorpe  v.  R.  R.  Co.,  supra. 


34 

whose  charters  the  Legislature  has  retained  no  power 
of  alteration,  amendment  or  repeaP;  and  even  to  those 
in  whose  charter  there  is  a  provision  that  no  alteration 
should  be  made  in  it.' 

Another  class  ot"  statutes  imposing  an  additional 
burden  upon  railroad  companies  already  in  existence, 
that  has  been  held  constitutional,  is  the  one  enabling  the 
personal  representatives  of  a  man  killed  through  the  neg- 
ligence of  the  company  to  get  damages  from  the  com- 
pany, for  the  killing,  where  the  man  himself  could  have 
recovered  damages  for  the  injury,  had  he  not  been 
killed^  At  common  law  the  representatives  of  the 
deceased  had  no  such  right  of  action  against  the  com- 
pany. The  company  is  held  responsible  in  damages  in 
this  way  not  only  to  compensate  the  family  of  the 
deceased,  but  also  to  make  it  more  careful  in  running  its 
trains,  etc.  "  Neither  a  corporation  nor  a  citizen  can 
have  a  vested  right  to  do  wrong;  to  take  human  life 
intentionally  or  negligently.  To  prevent  so  serious  an 
evil,  the  General  Assembly  may  compel  the  wrong-doer 
whether  private  or  corporate,  to  make  pecuniary  compen- 
sation* " 

Viewing  these  statutes  as  a  means  of  making  the  rail- 
road companies  exercise  the  greatest  possible  care  in  run- 
ning their  trains,  to  insure  the  safety  of  the  public,  it  is 
easy  to  see  how  they  should  rightly  apply  to  corporations 
already  in  existence. 

It  is  not  easy  to  say  just  how  far  this  power  to  regulate 
railroad  companies  extends.  In  certain  cases  the  States 
have  been  held  to   have   exceeded   their   powers   in  the 

1  Gorman  v.  Pacific  R.  R.  Co.,  26  Mo.  441, 

2  New  Albany  &  Salem  R.  R.  Co.  «.  Tilton,  12  Ind.  3. 

3  Boston,  Concord  &  Montreal  R.  R.  v.  The  State,  32  N.  H.  215  ; 
South-western  R.  R.  ®.  Paulk,  24  Ga.  356. 

*  Opinion  of  Ct,  in  R.  R.  Co.  v.  Paulk  supra.  See  also  Patterson 
on  Railway  Accident  Law,  p.  p.  40G-S  for  the  other  States  that  have 
enacted  statutes  of  this  sort. 


35 

statutes  which  they  have  enacted ;  but  in  many  cases 
these  statutes  have  not  been  held  unconstitutional,  neces- 
sarily and  under  all  circumstances;  but  they  have  been 
held  unconstitutional,  because  the  proper  occasion  for 
their  enactment  had  not  arisen.  "  It  is  not  within  the 
power  of  the  general  assembly,  under  the  pretence  of 
exercising  the  police  power  of  the  State,  to  enact  laws  not 
necessary  to  the  preservation  of  the  health  and  safety  of 
the  cammunity  that  will  be  oppressive  and  burdensome 
to  the  people.  If  it  should  prohibit  that  which  is  harm- 
less in  itself,  or  command  that  to  be  done  which  does  not 
tend  to  promote  the  health,  safety  or  welfare  of  society, 
it  would  be  an  unauthorized  exercise  of  power,  and  it 
would  be  the  duty  of  the  courts  to  declare  such  legisla- 
tion void."  ^  This  rule  was  applied  in  the  above  case, 
and  a  city  ordinance  requiring  the  railway  company  to 
keep  a  flagman  by  day  and  a  red  lantern  by  night  at  a 
certain  crossing  was  held  to  be  an  unreasonable  require- 
ment and  therefore  void.  And  yet  from  what  the  other 
cases  decide^  and  from  what  the  judge  says  in  this  very 
case,  there  is  no  doubt  that  there  is  such  an  ordinance 
would  be  valid  if  the  crossing  were  a  particularly  dang- 
erous one\ 

When  the  public  safety  calls  for  a  regulation,  be  its 
character  what  it  may,  it  must  be  considered  one  which 
the  State  could  impose  and  constitutional. 

At  one  time  it  seems  to  have  been  doubted  whether 
care  for  the  public  convenience  merely,  would  justify  a 
State  in  imposing  fresh  burdens  or  regulations  on  a  cor- 
poration, and  a  case*  decided  by  the  Maine  Court  and 

1  Opinion  of  Ct.  in  Toledo,  Wabash  &  Western  Railway  Co.  v.  The 
City  of  Jacksonville  67  111.  37. 

*  E.  g.  Delaware,  Lackawana  &  Western  R.  R.  Co.  v.  East  Orange, 
12  V  room  127. 

«  See  also  Miller  v.  11.  R.  Co.,  21  Barbour  513  ;  Ohio  &  Miss.  R.  R. 
Co.  V.  Lackey,  78  111.  55  ;  State  v.  Richmond  &  Danville  R.  R.  Co.,  73 
N.  C.  537. 

*  State  V.  Noyes  47  Me.  189. 


36 

often  cited  as  an  authority  says  distinctly  that  regard  for 
convenience  alone  does  not  justify  new  regulations  or 
burdens.  A  statute  of  Maine  enacted  that,  where  the 
tracks  of  two  railroad  companies  crossed  each  other  and 
a  train  was  due  at  the  junction  at  the  same  time  on  each 
road,  the  train  arriving  first  should  wait  a  certain  length 
of  time  (the  time  fixed  was  not  necessarily  unreasonably 
long,  being  but  20  minutes)  for  the  other  train,  so  as  to 
accomodate  passengers  who  should  want  to  change  cars. 
This  statute  was  held  unconstitutional.  But  when  the 
question  as  to  whether  mere  public  convenience  justified 
a  State  in  imposing  new  burdens  or  regulations  on  a  cor- 
poration came  before  the  Supreme  Court  of  the  United 
tStates,  that  Court  held  that  it  did.  In  Stone  v.  Farmers 
Loan  &  Trust  Co.'  a  statute  of  Mississippi  providing  for 
the  appointment  of  certain  commissioners  one  of  whose 
duties  it  was  to  see  that  railroad  companies  provided 
suitable  reception  rooms  for  the  use  and  accommodation 
of  their  passengers  and  kept  bulletin  boards  in  these 
rooms  containing  certain  information  in  regard  to  trains, 
was  held  constitutional.  These  regulations  were  held  to 
be  among  those  "  affecting  the  comfort,  the  convenience, 
or  the  safety"-  of  the  traveling  public,  and  within  the  leg- 
islative power  of  the  State.  The  public  convenience, 
therefore,  justifies  a  State  in  imposing  fresh  regulations 
orburdenSjif  they  are  not  unreasonable,  upon  a  corporation. 

Statutes  of  a  different  kind  are  those  making  a  railroad 
company  or  corporation  of  a  similar  character  liable  for 
consequential  injuries  done  to  property  by  it  in  the  ex- 
ercise of  the  right  of  eminent  domain  granted  to  the  cor- 
poration by  a  State,  for  which  the  corporation  was  not 
liable  when  it  was  created. 

1  116  U.  S.  307. 

*  Opinion  of  Ct.  in  above  case  per  Waite,  C.  J.,  p.  334. 


31 

Such  statutes  are  unconstitutional.^  But  where  the 
State  reserved  the  power  to  alter,  amend  or  repeal  the 
charter  of  the  corporation,  the  act  is  constitutional." 

It  is  not  easy  to  see  just  why  the  State  should  not  be 
able  to  compel  the  corporation  to  be  responsible  for  these 
consequential  damages,  when  the  act  applies  to  injuries 
done  after  its  passage,  as  was  the  case  in  Penn.  R.  R.  Co., 
vs.  Duncan  (when  the  act  is  retrospective  as  it  was  in 
Bailey  vs.  P.  W.  &  B.  R.  R.  Co.,  the  case  is  different)  un- 
less it  reserved  to  itself  the  power  to  alter  or  repeal  the 
charter  of  the  corporation.  There  is  a  clear  distinction 
between  these  damages  and  those  which  the  representa- 
tives of  a  man  killed  by  a  railroad  company  can  get,  for 
the  latter  are  a  means  of  providing  for  the  public  safety 
as  well  as  for  making  compensation  to  the  relatives  of  the 
injured  person  ;  but  I  do  not  see  why  the  reasoning  ap- 
plied to  the  statutes  regulating  charges  (discussed  later) 
should  not  be  held  to  apply  equally  well  here.  The  stat- 
utes making  the  company  responsible  for  consequential 
injuries  need  not  interfere  with  the  company  in  the  exer^ 
cise  of  its  franchises  any  more  than  do  those  regulating 
charges ;  and  certainly,  he  whose  property  has  been 
greatly  lessened  in  value  by  an  act  of  a  corporation ; 
through  no  fault  of  his  own,  is  just  as  much  in  need  of  a 
legislative  protection  as  he  who  is  compelled  to  pay  an 
unreasonable  charge  for  transportation.  An  act  making 
an  individual  responsible  in  this  way  for  consequential 
damages  would  be  constitutionaP ;  the  state  when  cre- 
ating the  corporation  could  undoubtedly  say  for  what  in- 
juries to  property  damaged  by  it  the  corporation  should 

1  Sailey  v.  P.  W.  &  B.  R.  R.  Co.;  4  Har.  (Del.)  389,  opinion  of  Ct. 
delivered  by  Gibson,  C.  J.  in  Monongabela  Navig.  Co.  vs.  Coon,  6. 
Ban-.  379,  383. 

2  Monongabela  Navigation  Co.  v.  Coon,  6  Barr  379  ;  Penna.  R.  R. 
Co.  V.  Duncan,  111  Penna.  353. 

'  Opinion  of  coui-t  delivered  by  Hare,  P.  J.,  in  Dune  in  «.  Penna.  R. 
R.  Co.,  7  W.  N.  C.  551,  556. 


38 

be  responsible ;  the  charter  of  the  corporation  contained 
no  exemption  from  such  regulations ;  and  it  is  very  diffi- 
cult to  see  why  the  principle  laid  down  in  Providence 
Bank  vs.  Billings  (supra)  should  not  be  applied  in  such 
cases,  and  the  corporation  be  bound  by  these  Acts,  even  if 
the  legislature  did  not  reserve  to  itself  the  power  to  alter, 
amend,  or  repeal  the  charter  of  the  corporation. 

Another  ver}^  important  class  of  legislation  and  of  adju- 
dications following  it  arose  in  connection  with  railroad 
companies.  As  the  railroad  companies  developed  and 
became  firml}'^  established  it  was  found  that  they  charged 
more  for  carrying  freight  and  passengers  than  the  differ- 
ent State  legislatures  thought  proper.  Even  competition 
did  not  keep  the  charges  down  to  a  reasonable  figure,  and 
the  result  was  a  very  widespread  movement  on  the  part 
of  the  different  States  to  regulate  by  statute  the  charges 
that  the  railroad  companies  could  exact.  The  companies 
naturally  refused  to  be  controlled  in  this  way,  and  the 
question  as  to  the  constitutionality  of  these  statutes  came 
before  the  Supreme  Court  of  the  United  States  in  a  num- 
ber of  cases. 

The  first  of  these  cases  was  Chicago,  Burlington  & 
Quincy  R.  R.  Co.  vs.  Iowa'  decided  in  1876.  In  1874 
the  legislature  of  Iowa  passed  "An  act  to  establish  rea- 
sonable maximum  rates  of  charges  for  the  transportation 
of  freight  and  passengers  on  the  different  railroads  of  this 
state."  The  charter  of  the  C.  B.  &  Q.  R.  R.  Co.  antedated 
this  act,  but  was  granted  expressly  subject  to  such  rules 
and  regulations  as  the  legislature  might  from  time  to 
time  enact  and  provide. 

It  had  already  been  decided  that  a  state  has  the  unlim- 
ited right  to  charge  or  authorize  others  to  charge,  toll, 
freight  or  fare  for  transportation  on  its  roads,  canals,  and 
railroads,  because  these  roads,  canals,  and  railroads,  are 
its  own  works,  or  constructed  under  its  own  authority. 

1  94  U.  S.  155. 

2  R.  R.  Co.  V.  Maryland  2i  Wallace  456. 


39 

The  Court  had  also  decided  that  when  an  employment 
or  business  becomes  a  matter  of  such  public  interest  or 
importance  as  to  create  a  common  charge  or  burden  upon 
the  citizen ;  in  other  words  when  it  becomes  a  practical 
monopoly,  to  which  the  citizen  is  compelled  to  resort,  and 
by  means  of  which  a  tribute  can  be  exacted  from 
the  community,  it  is  subject  to  regulation  by  the 
legislative  power'.  The  question  then  arose:  Does 
the  charter  of  a  railroad  company  protect  the  company 
from  such  legislative  regulation  of  its  charges  as  the  state 
could  have  imposed  when  the  company  was  created ;  or 
from  such  control  as  to  charges  as  a  state  can  exercise 
over  a  private  individual  at  any  time  when  his  business 
is  such  as  to  come  within  the  doctrine  of  Munn  vs.  Illi- 
nois? The  company  claimed  exemption  from  such  con- 
trol, but  the  principle  laid  down  in  Providence  Bank  vs. 
Billings  (supra)  that  "  Any  privileges  which  may  exempt 
it  (a  corporation)  from  the  burdens  common  to  individ- 
uals do  not  flow  necessarily  from  the  charter,  but  must  be 
expressed  in  it,  or  they  no  not  exist,"  was  applied  ;  and  it 
was  held  that  the  company  was  subject  to  such  control. 
As  the  price  an  individual  can  charge  for  his  labor,  &c., 
is  subject  to  legislative  control  under  certain  circum- 
stances; so  a  corporation  is  subject  to  the  same  control, 
unless  specially  exempted  from  it  by  its  charter.  "Rail- 
road companies"  says  Waite,  C.  J.  in  the  opinion  of  the 
court,  p  161,  are  carriers  for  hire.  They  are  incorporated 
as  such,  and  given  extraordinary  powers,  in  order  that 
they  may  better  serve  the  public  in  that  capacity.  They 
are,  therefore,  engaged  in  a  public  employment,  affecting 
the  public  interest,  and  under  the  decision  in  Munn  vs. 
Illinois  subject  to  legislative  control  as  to  their  rates  of 
fare  and  freight,  unless  protected  by  their  charters." 

This  case  having  settled  the  fact  that  a  State  Legisla- 
ture could  regulate  the  charges  of  railroad  companies, 
unless  the  charter  of  the  company  exempted  it  from  such 

1  Munn  V.  Illinois,  94  U.  S.  113. 


40 

regulation,  the  question  then  arose  as  to  what  constituted 
such  an  exemption.  One  clause  after  another  contained 
in  the  charters  of  the  different  companies  was  held  not  to 
be  an  exemption,'  until  finally,  in  Stone  vs.  Farmers' 
Loan  &  Trust  Co."  the  court  held  that  a  provision  in  the 
charter  of  the  Mobile  &  Onio  Railroad  Company  "  that  it 
shall  be  lawful  for  the  company  hereby  incorporated  from 
time  to  time  to  fix,  regulate,  and  receive  the  toll  and 
charges  by  them  to  be  received  for  transportation  of  per- 
sons or  property  on  their  railroad  or  way  aforesaid,  &c.," 
did  not  exempt  the  company  from  legislative  control  in 
the  matter  of  charges.  "  Power  is  granted  to  fix  reasonable 
charges,  but  what  shall  be  deemed  reasonable  in  law  is 
nowhere  indicated.  There  is  no  rate  specified,  nor  any 
limit  set.  Nothing  whatever  is  said  of  the  way  in  which 
the  question  of  reasonableness  is  to  be  settled.  All  that 
is  left  as  it  was.  Consequently,  all  the  power  which  the 
State  had  in  the  matter  before  the  charter  it  retained  after- 
wards."^ Nor  is  it  necessary,  in  order  that  the  State  should 
have  this  power  to  regulate  the  charges  of  corporations, 
that  it  should  reserve  to  itself  the  power  to  alter,  amend, 
or  repeal  their  charters  at  its  pleasure.*  There  is  a  limit, 
however,  to  the  regulations  that  the  State  can  impose  in 
the  matter  of  charges.  "  This  power  to  regulate  is  not  a 
power  to  destroy,  and  limitation  is  not  the  equivalent  of 
confiscation.  Under  pretense  of  regulating  fares  and 
freights,  the  State  can  not  require  a  railroad  corporation 
to  carry  persons  or  property  without  reward ;  neither  can 
it  do  that  which  in  law  amounts  to  a  taking  of  private 

1  Peik  V,  Chicago  &  Northwestern  Railway  Co.,  94  U.  S.  164  ;  Rug- 
gles  V.  Illinois,  108  U.  S.  526. 

2  116  U.  S.  307. 

3  Fi  om  opinion  of  Waite,  C.  J.  p.  330.  See  also  Stone  v.  111.  Cen- 
tral R.  R.  Co.  and  Stone  v.  N.  O.  &  R.  R.  Co.  116  U.  S.  347  and  352. 

*  Opinion  of  court  delivered  by  Waite,  C.  J.  in  Stone  v.  Farmers' 
Loan  &  Trust  Co.  116  U.  S.  307,  p.  325  ;  dissentinp;  opinion  of  Field,  .T. 
in  the  Granger  Cases,  Stone  v.  Wisconsin,  94  U.  S.  180,  p.  185. 


41 

property  for  public  use  without  just  compensation,  or 
without  due  process  of  law."^  "  A  regulation  of  the  fare  a 
railroad  company  should  charge,  which  brought  its  gross 
receipts  so  low  that  after  paying  all  expenses  there  was 
not  legal  interest  on  the  outlay  left,  would  be  confiscation 
and  illegal.""-  ^ 

Nor  must  this  control  amount  to  a  regulation  of  inter- 
state commerce/  the  power  to  regulate  which  is  vested 
solely  in  Congress. 

The  question,  so  far  as  I  know,  has  not  yet  come  before 
the  Supreme  Court  of  the  United  States,  whether  the  State 
could  still  regulate  the  charges,  after  granting  the  com- 
pany express  exemption  from  such  control.  In  Laurel 
Fork  &  Sand  Hill  R.  R.  Co.  vs.  West  Virginia  Transpor- 
tation Co.,*  the  court  says :  "  From  what  has  been  said, 
it  is  apparent  that  even  if  the  Legislature  in  the  charter 
of  L.  F.  &  S.  H.  R.  R.  Co.  had  expressly  stipulated,  that 
it  would  never  reduce  the  tolls  which  the  company  was, 

T  Opinion  of  court  by  Waite,  C.  J.  in  Stone  v.  Farmers'  Loan  & 
Trust  Co.,  116  U.  S.  307,  p.  331. 

2  Judge  Hare's  lectures  on  Constitutional  Law,  delivered  in  1886- 
87,  at  the  Law  School  of  the  University  of  Pinnsylvauia,  p.  44  of  slate 
notes. 

A  The  rule  given  above  was  Liid  down,  I  believe,  before  the  ques- 
tion as  to  just  how  far  the  State  could  regulate  the  fares  charged  by  a 
railroad  company  had  ever  come  before  the  courts.  The  question  has 
very  recently  come  before  a  Federal  Court  and  the  rule  as  laid  down 
by  this  court  difiers  from  the  rule  given  above.  In  Cliicago,  N.  W, 
Ry.  Co.  V.  Dey,  Fed.  Rep.  Oct,  16,  1888,  p.  8G6,  decided  in  the  Circuit 
Court  iu  the  southern  district  of  Iowa  ;  Brewer,  J.  says  :  "  The  rule, 
therefore,  to  be  laid  down  is  this,  that  where  1he  proposed  rates  will 
give  some  compensation,  however  small,  to  the  owners  of  the  railroad 
property,  the  courts  have  no  power  to  interfere.  Bat  where  the  rates 
prescribed  will  not  pay  some  compensation  to  the  owners,  then  it  is 
the  duty  of  the  courts  to  interfere  and  protect  the  companies  from 
such  rates.  Compensation  implies  three  things  :  Payment  of  cost  of 
service,  interest  on  bonds,  and  then  some  dividend." 

*  Opinion  of  Waite,  C.  .J.  iu  Scone  v.  Farmers'  &c.  Co.,  116  U.  S. 
307. 

*  25  W.  Va.  3-24. 


42 

by  its  charter,  authorized  to  take,  it  could  nevertheless 
have  done  so  whenever  it  pleased,  &c."  But  the  weight  of 
authority  is  decidedly  the  other  way,'  and  Harlan,  J.  in 
his  assenting  opinion  in  Ruggles  vs.  Illinois,Mn  speaking 
of  some  of  the  earlier  of  these  railroad  cases  says  that 
these  cases  establish  among  other  principles  "  that  such 
corporation  may  be  protected  by  its  charter  against  abso- 
lute legislative  control  in  the  matter  of  rates  for  the  car- 
riage of  passengers  and  freight." 

To  adopt  the  other  view  is  to  carry  the  police  power  of 
the  State  to  what  seems  to  me  to  be  an  unwarrantable 
extent;  for  although,  as  we  shall  see  later,  in  certain  cases 
the  State  can  control  a  corporation  entirely  independently 
of  its  charter,  this  is  only  where  the  public  health,  morals, 
or  safety  demand  such  action,  and  it  is  hard  to  see  how 
the  public  health,  morals,  or  safety  could  call  for  the  leg- 
islative control  of  charges.  Should  they,  however,  at  any 
time  call  for  such  control,  the  power  of  the  State  to  exer- 
cise it  would  be  unquestioned,  any  provision  in  the 
charter  of  the  corporation  to  the  contrary  notwithstand- 
ing. But  until  the  public  health,  morals,  or  safety  call 
for  such  control,  the  argument  of  Mr.  Chief  Justice  Waite 
in  Chicago,  Burlington  &  Quincy  R.  R.  Co.  vs.  Iowa 
(supra),  where  he  says  p.  162,  "  It  was  within  the  power  of 
the  company  to  call  upon  the  Legislature  to  fix  perma- 
nently this  limit,  and  make  it  a  part  of  the  charter,  and  if 
it  was  refused,  to  refrain  from  building  the  road,"  should 
be  applied  to  the  other  side.  If  the  Legislature  had  not 
wanted  to  part  with  its  power  to  control  charges  it  need 
not  have  done  so ;  but  having  once  done  so  it  should  be 
bound  by  its  contract. 

If  the  Legislature  reserves  to  itself  the  power  to  alter, 
amend,  or  repeal  the  charter,  the  case  is  different,  and  the 

1  See  lion  R,  R.  Co.  v.  Lawrence  Furnace  Co.,  29  Ohio  State  208  : 
and  also  R.  R.  Commissioners  v.  Yazoo  &  Miss.  R.  R.  Co.,  67  Miss 
€07  ;  Sloan  v.  Pacific  R.  R.  Co.,  61  Mo.  24. 

2  108  U.  S.  526. 


43 

probable  effect  of  such  a  reserved  power  will  be  di3cussed 
later. 

Whatever  we  may  think  of  these  statutes  controlling 
the  charges  railroad  companies  can  exact ;  whether  we 
think  they  come  clearly  within  the  legislative  power  of 
the  state;  or  whether  with  Mr.  Justice  Field, ^  we  are 
forced  to  "  admit  that  the  power  of  the  legislature  over 
the  corporation,  is,  in  spite  of  the  constitutional  limita- 
tions, as  absolute  as  that  of  the  Parliament  of  Great 
Britain,"  there  can  be  no  doubt  of  one  thing.  The  action 
of  so  many  states  in  this  direction  followed  finally  by  the 
Inter-State  Commerce  Act  passed  by  Congress  in  1887, 
shows  conclusively  that  there  was  a  very  wide-spread  and 
urgent  need  felt  for  some  means  to  control  the  charges 
railroad  companies  could  exact. 

Plank  road  and  turnpike  companies  are  very  similar 
to  railroad  companies  in  many  of  tlieir  relations  to  the 
public  and  some  of  the  principles  that  have  been  laid 
down  in  regard  to  them  apply  equally  well  to  railroads. 
Perhaps  the  most  important  case  in  which  a  turnpike 
company  was  discussed  is  Pingry  vs.  Washburn,'*  where 
it  was  held  that  a  statute  of  Vermont,  allowing  the  in- 
habitants of  a  certain  village  to  pass  over  the  bridge  of  a 
turnpike  company  without  paying  toll,  was  unconstitu- 
tional. Doubtless  a  similar  statute  forcing  a  railroad 
company  to  carry  any  particular  class  of  people  without 
compensation,  would  also  be  held  unconstitutional.  An- 
other case  is  Detroit  vs.  Detroit  &  Howell  Plank  Road 
€o.'  A  statute  of  Michigan  passed  in  1879  required 
plank  load  companies  to  remove  their  toll-gates  beyond 

^  Dissenting  opiniou  of  Field, J,  in  Railroad  Commission  Cases,  Stone 
et  al  vs.  Farmer's  &c.,  Co.,  116  U.  S.  307,  346.  The  Justice  is  speaking 
of  the  action  of  several  states  in  appointing  commissioners  with  the 
general  duty  of  regulating  the  charges  of  railroad  companies,  and  of 
■exercising  police  control  over  them  in  certain  other  particulars. 

2  I  Aiken  264. 

»  43  Mich.  140. 


44 

municipal  limits.  The  Detroit  &  Howell  Plank  Road 
Co.  was  in-  existence  when  this  act  was  passed  and 
claimed  that  it  was  exempted  from  the  act,  although  its 
charter  was  subject  to  alteration,  amendment,  or  repeal 
at  the  time  the  act  was  passed.  The  court  held  the  stat- 
ute unconstitutional.^ 

A  statute  of  this  sort  also,  not  regulating  the  charges  of 
the  corporation,  but  depriving  it  of  a  certain  definite 
source  of  income,  would  very  probably  be  held  to  apply 
to  railroad  companies  as  well  as  to  plank-road  companies."*^ 


CHAPTER  VI. 

Passing  now,  from  the  legislation  which  was  passed  in 
connection  with  railroad  companies  and  the  views  the 
courts  have  taken  of  this  legislation;  we  come  upon 
a  large  number  of  cases  in  which  various  legislative  reg- 
ulations and  burdens,  imposed  upon  corporations,  have 
been  discussed  in  different  State  Courts  and  in  the  Su- 
preme Court  of  the  United  States.  The  same  principles 
govern  these  cases  that  govern  the  railroad  cases  and,  as 
in  the  case  of  the  legislation  in  regard  to  railroad  com- 
panies, many  of  the  statutes  have  been  held  unconstitu- 
tional and  void.  It  would  make  an  essay  of  this  sort  too 
long  if  all  these  cases  were  to  be  discussed  and  I  shall 
only  speak  of  some  of  the  more  striking  ones. 

Statutes  limiting  the  charges  a  corporation  can  exact, 
when  its  business  is  such  as  to  come  within  the  doctrine  of 
Munn  V.  Illinois,  (supra,)  have  been  held  valid  wiien  ap- 

^  See  also  White's  Creek  Turupike  Company  vs.  Davidson  County 
etal.  3  Ten.  Chanc.  396. 

A  In  the  plank-road  case  the  statute  was  held  void  as  taking 
property  without  due  process  of  law,  and  not  as  impairins  the  obli- 
gation of  the  charter-contract.  It  sems  to  me  that  the  statute  might 
have  been  held  void  on  the  latter  ground  as  well ;  at  any  rate  the  case 
is  an  interesting  one  to  consider  in  relation  to  the  railroad  cases  pre- 
viously discussed. 


45 

plied  to  other  corporations  than  railroads.  In  the  State 
V.  Columbus  Gas  Light  and  Coke  Co.^  it  was  held  that  a 
statute  of  Ohio,  limiting  the  price  to  be  charged  by  the 
company  for  gas  was  constitutional  and  in  Hockett  v. 
State"  a  statute  of  Indiana  limiting  the  rental  a  tele- 
phone company  could  charge  for  the  use  of  a  telephone, 
was  held  valid.  The  same  question  came  up  again  in  a 
California  case,  though  the  circumstances  under  which  it 
arose  were  different.'  Here  a  statute  providing  a  method 
for  appointing  certain  commissioners,  different  from  the 
method  provided  by  the  charter  of  the  corporation, 
amounted,  potentially  at  least,  to  a  regulation  of  the 
charges  the  corporation  could  exact,  and  the  statute  was 
held  to  be  constitutional.' 


CHAPTER  VII. 

Again,  as  in  the  railroad  cases,  statutes  imposing  addi- 
tional burdens  on  corporations,  when  the  public  safety 
does  not  call  for  such  statutes  and  the  State  has  not  re- 
served to  itself  the  power  to  alter  or  amend  the  charter  of 
the  corporation,  have  been  held  unconstitutional  for  the 
most  part.  Thus  an  act  of  Pennsylvania  requiring  the 
Erie  Canal  Co.  "  to  build,  repair  and  keep  in  repair  all 
bridges  over  their  canal  on  public  roads  and  streets  cross- 
ing the  same,  was  held  anconstitutional,  and  that  though 
the  State,  which  formerly  owned  the  canal,  built  and  re- 
paired the  bridges  as  the  Act  required  the  company  to 
do/  Another  act  of  Pennsylvania  required  the  owners  of 
dams  across  the  Susquehanna  river  to  make  sluices  in 

i    32  Amer.  Rep.  390. 

2  23  Cent.  L.  J.  34. 

3  Spring  Valley  Water  Works  v.  Schottler,  110  U.  S,  347 

*  See  also  Parker  et  al  v.  Metropolitan  R.  R.  Co.,  109  Mass.  506, 
where  a  statute  limiting  the  fares  a  ferry  company  could  exact  was 
held  to  be  constitutional, 

5  City  of  Erie  v.  Erie  Canal  Co.,  59  Penn.  174. 


46 

them  for  the  passage  of  fish,  and  this  act  was  also  held  to 
be  unconstitutional  as  applied  to  corporations/  In  neither 
of  these  cases  the  State  reserved  to  itself  the  power  to  re- 
peal or  alter  the  charter  of  the  company.  In  Massachu- 
setts, however,  where  the  State  reserved  this  power,  it  was 
held  that  a  corporation  could  be  compelled  to  put 
fishways  in  its  dam."  But  even  in  that  State  where  the 
company  by  the  terms  of  its  amended  charter  was  ex- 
empted from  any  obligation  to  construct  fishways,  it  could 
not  be  forced  to  construct  them/  Whether  the  Supreme 
Court  of  the  United  States  would  hold  it  necessary  for  the 
State  to  reserve  to  itself  the  power  to  alter  or  repeal  the 
charter  of  a  corporation  in  order  for  it  to  be  able  to  com- 
pel the  corporation  to  put  fishways  in  its  dam,  is  very 
hard  to  say. 

In  The  Commonwealth  vs.  Proprietors  of  the  New  Bed- 
ford Bridge  Co.,^  a  statute  of  Massachusetts  ordering  a 
certain  corporation  to  widen  the  draws  of  its  bridge  was 
held  unconstitutional.  But  in  the  charter  of  this  com- 
pany it  was  provided  that  the  bridge  should  contain  two 
suitable  draws  at  least  30  feet  wide,  under  which  provi- 
sion, the  court  held,  the  company  could  be  forced  to  widen 
its  draws.  But  whether  the  present  draws  were  of  a  suit- 
able width  was  a  judicial,  not  a  legislative  question.  A 
similar  act  of  Connecticut  was  held  void.*  But  in  this 
case  the  Judge  particularly  says  that  the  writ  of  quo  war- 
ranto w^as  not  prosecuted  on  the  ground  that  the  bridge 
was  a  public  nuisance,  obstructing  the  common  and  free 
use  of  the  Housatonic  river,  nor  does  the  court  pass  upon 
the  question  as  to  whether  the  Bridge  Company  could 
justify  under  their  charter  the  continuance  of  the  bridge 

1  Commonwealth  v.  Penn.  Canal  Co.,  66  Penn.  41. 

2  Commissioners  v.  Holyoke  Co.,  104  Mass.  446,  affirmed  in  Hol- 
yoke  Co.  v.  Lyman,  15  Wallace  500. 

»  Commonwealth  v,  Essex,  13  Gray  248. 

4  2  Gray  350. 

*  Washington  Bridge  Co.  v.  Conn.,  18  Conn.  53. 


47 

in  its  present  condition,  if,  in  fact,  it  essentially  obstructs 
the  passage  of  vessels  to  and  from  a  port  of  delivery  above. 
This  certainly  looks  as  if  the  act  would  have  been  held 
constitutional  under  certain  circumstances ;  and  had  there 
been  no  provision  in  the  charter  of  the  Massachusetts  cor- 
poration under  which  it  could  have  been  compelled  to 
■  widen  its  draws,  I  can  not  help  thinking  that  the  Massa- 
chusetts statute  might  have  been  held  constitutional. 

On  the  other  hand,  an  ordinance  of  Philadelphia 
requiring  passenger  cars  to  be  numbered  and  to  be  licensed 
on  paying  a  stipulated  sum  for  each  car,  was  held  a  valid 
police  regulation.^  It  is  true  that  the  burden  imposed  by 
this  ordinance  on  the  company  was  a  very  small  one ;  at 
the  same  time  it  was  a  burden  which  the  company  objected 
to  bearing,  and  it  was  not  demanded  by  the  public  safety. 
We  have  already  seen  that  statutes  regulating  corporation 
charges  are  valid  in  certain  cases,  and  these  regulations 
are  not  demanded  by  the  public  safety. 

It  is  not  easy  for  me  to  reconcile  all  the  cases  in  which 
the  acts  discussed  were  not  demanded  by  the  public  safety,. 
and  the  charter  of  the  corporation  was  not  subject  to  alter- 
ation or  repeal,  and  it  seems  to  me  that  in  some  of  them 
the  State  courts  have  not  followed  the  principle  of  Provi- 
dence Bank  vs.  Billings  (supra). 

CHAPTER  VIII. 

But  where  a  corporation  is  expressly  given  by  its  charter 
special  rights,  as  certain  exclusive  privileges,  statutes  at 
variance  with  the  charter  are  void.  An  interesting  case 
of  this  sort,  one  in  which  the  statute  discussed  seems  to 
be  close  to  the  border  line  between  constitutional  and 
unconstitutional  legislation,  is  that  of  the  Binghampton 
Bridge  Company.-  An  Act  of  New  York  incorporated  a 
company  with  power  to  construct  a  bridge,  build  a  toll- 

1  Frankford  «&;  Pliila.  Passenger  K.  W.  Co.  v.  Phila.,  58  Penn.  119, 
»  3  Wallace  51. 


48 

gate,  and  take  the  tolls  fixed  by  the  Act.  The  charter  also 
contained  an  express  provision  that  no  person  or  persons 
should  erect  any  bridge  within  two  miles  either  above  or 
below  the  first  one.  Subsequently  to  the  building  of  the 
bridge,  some  of  the  inhabitants  of  the  town  of  Binghamp- 
ton  petitioned  the  New  York  Legislature  to  authorize  the 
building  of  another  bridge  within  the  limits  reserved  for- 
the  first  one.  The  petition  set  forth  that  the  town  had  a 
population  of  10,000  inhabitants,  and  had  increased 
largely  in  size,  and  that  it  was  inconvenient  to  have  but 
one  bridge.  "That  by  reason  of  the  great  amount  of 
travel  over  the  present  bridge  and  other  causes  it  is  fre- 
quentl}^  out  of  repair,  so  that  only  one  side  of  it  can  be 
used,  and  at  such  times  it  is  passed  only  with  great  delay 
and  difficulty."  The  New  York  Lsgislature,  acting  on 
this  petition,  incorporated  the  Binghampton  Bridge  Com- 
pany, which  built  a  bridge  a  few  rods  above  the  old  one. 
The  new  structure  greatly  diminished  the  tolls  of  the  old 
one  and  seemed  likely  to  destroy  them  altogether.  The 
question  whether  the  act  under  which  the  new  company 
was  incorporated  was  constitutional,  was  a  very  delicate 
one.  On  one  side  was  the  express  contract  contained  in 
the  charter  of  the  original  company,  and  the  great  dimi- 
nution of  profit  suffered  by  the  company  in  consequence 
of  the  contract  not  being  enforced ;  on  the  other  side,  was 
the  great  inconvenience  suffered  by  a  large  number  of 
people  and  the  fact  that  the  circumstances  had  changed 
very  much  since  the  bridge  was  built,  so  that  it  was  no 
longer  able  to  carry  out  effectually  the  purpose  (from  the 
standpoint  of  the  legislature)  for  which  it  had  been  built. 
The  court  decided  that  the  charter  of  the  first  company 
came  within  the  Dartmouth  College  Case,  and  that  the 
act  allowing  the  second  company  to  build  a  bridge  within 
two  miles  of  the  first  one  was  unconstitutional.  The 
judges  were  not  unanimous,  however,  the  Chief  Justice 
and  Field  and  Grier,  J.  J.  dissenting. 

We  may  perhaps  be  inclined  to  agree  with  the  dissent- 
ing opinion  in  this  case,  and  to  think  that  the  prevention 


49 

of  a  great  inconvenience  to  many  of  the  inhabitants  of  a 
large  town,  offers  a  suitable  opportunity  for  the  exercise  by 
a  State  of  its  police  power,  even  though  by  so  doing  the 
value  of  a  corporate  franchise  would  be  greatly  reduced 
on  account  of  the  State  failing  to  fulfil  its  part  of  the  con- 
tract. But  it  should  be  remembered  that  in  this  case  no 
positive,  active  nuisance  (as  was  the  case  in  Fertilizing 
Co.  V.  Hyde  Park,  infra)  called  for  such  an  extreme  exer- 
cise of  the  police  power,  as  the  State  would  liave  made, 
had  it  not  been  bound  by  the  express  agreement  in  the 
charter  of  the  first  company.  Moreover,  the  State,  in  the 
exercise  of  its  right  of  eminent  domain,  could  have  taken 
the  bridge  and  the  road  leading  to  it  from  the  company, 
making  the  company  due  compensation  therefor,'  in 
which  case  the  stockholders  of  the  corporation  would  have 
had  nothing  to  complain  of,  and  a  new  bridge  could  then 
have  been  built  as  close  to  the  old  one  as  was  desirable. 

The  statute  of  New  York  incorporating  the  second 
company  was  enacted  by  the  State  in  exercise  of  its  police- 
power  ;  but  the  need  for  the  second  bridge  was  not  so  ur- 
gent as  to  justify  the  State  in  disregarding  an  express 
provision  in  the  charter  of  the  first  company."  The  pro- 
ject of  building  the  first  bridge  was  too  great  a  one  to  be 
undertaken  by  an  individual.  A  large  sum  of  money 
was  necessary,  and  returns  on  it  were  far  distant ;  to  in- 
duce public  spirited  citizens  to  build  the  bridge,  the  State 
gave  them  certain  exclusive  rights,  which  under  the  cir- 
cumstances it  had  the  power  to  do  and  having  once  done 
so  it  was  bound  by  its  contract. 

1  See  Central  Bridge  Co.  v.  Lowell,  4  Gray  474,  where  the  bridge  of 
a  company  was  appropriated  for  a  town  way,  compensation  being 
made  to  the  company  therefor.  See  also  West  River  Bridge  Co.  v. 
Dix,  6  How.  507,  where  the  same  thing  was  done. 

a  In  this  case  the  dissenting  Judges  thought  that  there  was  no  pro- 
vision in  the  charter  of  the  first  corporation  excluding  other  bridges 
within  two  miles  on  both  sides  of  the  first  bridge.  Whether  the  mi- 
nority of  the  Court  would  have  held  as  they  did,  had  the  charter  of 
the  first  company  expressly  forbidden  other  bridges,  it  is  difBcult  to 
say.     See  also  Bridge  Proprietors  v.  Hoboken  Co.  1  Wallace  116. 


50 

This  principle  has  been  very  clearly  recognized  in 
other  and  more  recent  cases.  The  new  Orleans  Gas  Light 
Company,  had  under  its  charter,  the  exclusive  right  of 
supplying  New  Orleans  with  gas  for  50  years  dating  from 
1875.  The  Constitution  of  Louisiana  of  1879  abolished 
all  monopoly  features  in  the  charters  of  corporations  ex- 
cept such  as  were  contained  in  the  charters  of  railroad 
companies.  Acting  under  the  Constitution,  the  State  in- 
corporated the  Louisiana  Light  Co.  in  1881  with  certain 
rights  at  variance  with  the  exclusive  rights  contained  in 
charter  of  the  New  Orleans  Gas  Light  Co.  The  question 
then  arose  whether  the  State  could  in  this  way  repeal 
the  exclusive  rights  granted  to  the  older  company.  The 
Court  held  the  exclusive  right  to  supply  gas  to  a  mu- 
nicipality is  a  franchise  vested  in  the  State,  which  it 
can  grant  to  a  corporation,  and  such  a  grant  is  a  contract 
protected  by  the  Constitution  of  the  United  States.^ 

CHAPTER  IX. 

Some  of  the  cases  already  examined  have  illustrated 
what  seems  to  me  to  be  the  extreme  length  to  which  a 
State  should  go  in  the  exercise  of  its  police  power  in  the 
matter  of  regulating  the  charges  which  a  corporation  can 
exact,  unless  indeed  the  State  should  be  called  upon  to 
regulate  the  charges  under  circumstances  very  differ- 
ent from  any  that  have  yet  arisen.  But  there  are  other 
cases  in  which  the  States  have  gone  further  in  altering 
or  repealing  charters  in  the  exercise  of  their  police  power 
than  in  any  of  the  cases  heretofore  spoken  of. 

An  early  case  and  a  striking  one,  too,  is  Coates  v.  Mayor 
etc.,  of  N.  Y.'  decided  in  1827.  In  the  year  1697  letters 
patent   were   granted   under   William   III   of   England 

1  New  Orleans  Gas  Light  Co.  v.  Louisiana  Light  Co.,  115  U.  S.  650. 
See  also  New  Orleans  Water  Works  Co.  v.  Rivers  115  U.  S.  674,  and 
Boston  &  Lowell  R.  R.  Co.  v.  Salem  &  Lowell  R.  R.  Co.  2  Gray  1. 

2  7  Cowen  585. 


51 

whereby  certain  persons  were  constituted  a  body  corpor- 
ate under  the  name  of  "The  Rector  and  Inhabitants  of 
the  City  of  New  York,  in  communion  of  the  Protestant 
Episcopal  Cliurch  of  England."     The  corporation  under 
the  letters  took  certain  land  in  what  is  now  the  first  ward 
of  New  York  City  to  be  used  by  it  as  a  burying-ground. 
Sometime  before  the  year  1827  New  York  city,  under  a 
statute  of  the  State  of  New  York  giving  it  power  so  to  do, 
passed  a  by-law  prohibiting  the  interment  of  the  dead  in 
certain  parts  of  the  city.     The  parts  of  the  city  in  which 
interment  was  forbidden   included    the   land   which  th 
corporation  took  under  the  letters  patent  of  William  III 
and  which  trustees  now  held  for  the  benefit  of  the  cor- 
poration for  a  burying  ground.     The  question  was,  did 
the  by-law  of  New  York  city  apply  to  this  particular  cor- 
poration so  as  to  prevent  it  from  using  as  a  burying 
ground  land  which  it  held  for  that  express  purpose  and 
which  it  was  authorized  by  its  charter  to  use  as  such. 
The  Court  held  that  the  corporation  was  not   exempted 
from  the  operation  of  the  by-law,  and  said  in  its  opinion: 
"  Every  right,  from  absolute  ownership  in  property,  down 
to  a  mere  easement,  is  purchased  and   holden  subject  to 
the  restriction,  that  it  shall  be  so  exercised  as  not  to 
injure  others.     Tliough,  at  the  time  it  be  remote  and 
inoffensive,    the    purchaser    is  bound  to  know,  at  his 
peril,  that  it  may  become  otherwise  by  the  residence  of 
many  people  in  its  vicinity  and  that  it  must  yield  to  by- 
laws, or  other  regular  remedies  for  the  suppression  of 
nuisances.     We  are  of  the  opinion  that  this  by-law  is 
not  void,  either  as  being  unconstitutional,  or  as  conflicting 
with  what  we  acknowledge  as  a  fundamental  principle  of 
civilized  society,  that  private  property  shall  not  be  taken 
even   for   public  use,   without   ju3t   compensation.     No 
property  has,  in  this  instance,  been    entered   upon   or 
taken.     None  are  benefited  by  the  destruction,  or  rather 
the  suspension  of  the  rights  in  question,   in  any  other 
way  than  citizens  always  are,  when  one  of  their  number 
is   forbidden   to   continue   a   nuisance.     For   the    same 


52 

reason,  there  is  nothing  imparing  the  obligation  of  con- 
tracts, within  the  sense  of  the  Constitution  of  the  United 
States\" 

The  Supreme  Court  of  Illinois  decided  a  similar  case^ 
the  other  way,  but  should  the  question  ever  come  before 
the  Supreme  Court  of  the  United  States,  it  would  follow 
the  New  York  and  Pennsylvania  courts  I  believe. 

A  still  more  striking  case  is  Beer  Company  vs.  Com- 
monwealth of  Massachusetts^  decided  in  1879.  In 
1812  the  Boston  Beer  Co.  was  incorporated  for  the  pur- 
pose of  manufacturing  malt  liquors  in  all  their  varieties. 
Its  charter  was  subject  to  repeal  or  alteration.  Under 
the  Massachusetts  prohibitory  law  of  1869  certain  malt 
liquors  of  the  company  were  seized  and  declared  forfeited. 

Bartemyer  vs.  lowa^  had  already  decided  that  pro- 
hibitory laws  are  constitutional  as  applied  to  individuals. 
In  that  case  it  was  presumed  that  the  liquor  in  question 
was  not  in  existence  when  the  prohibitory  law  was  passed 
and  the  same  presumption  was  applied  in  Beer  Co.,  vs. 
Massachusetts,  so  that  the  chief  question  was:  Is  the  com- 
pany exempted  by  its  charter  from  the  general  prohibi- 
tory law,  which,  when  applied  to  individuals,  is  constitu- 
tional ?  The  court  held  that  the  law  applied  to  the  cor- 
poration no  less  than  to  individuals.  "If,"  says  Mr. 
Justice  Bradley,  in  the  opinion  of  the  court,  p  32,  "the 
public  safety  or  the  public  morals  require  the  discontinu- 
ance of  any  manufacture  or  traffic,  the  hand  of  the  legis- 
lature cannot  be  staid  from  providing  for  its  discontinu- 
ance, by  any  incidental  inconvenience  which  individuals 
or  corporations  may  suffer,  all  rights  are  held  subject  to 
the  police  power  of  the  state."  Since  Beer  Co.,  vs.  Mass- 
achusetts was  decided  another  case  has  settled  the  ques- 
tion that  prohibitory  laws,  so  far  as  individuals  are  con- 
cerned, apply  to  liquor  that  was  in  existence  before  the 

1  See  also  Kincaids  appeal,  16  P.  F.  Smith  433. 

2  Lakeview  v.  Roso  Hill  Cemetery,  70  111.  192. 

3  97  U.  S.  25. 

*  18  Wallace,  129. 


58 

laws  were  passed,  no  less  than  to  that  made  after  the 
passage  of  such  laws,^  and  should  the  same  question 
ever  come  up  in  regard  to  corporations,  the  law  would 
be  held  to  apply  to  them  in  the  same  manner  as  it  does  to 
individuals. 

The  statute  held  constitutional  in  Beer  Co.,  vs.  Massa- 
chusetts is  a  very  good  example  of  the  extreme  exercise 
of  police  power  in  one  direction.  A  company  was  incor- 
porated for  a  special  purpose,  lawful  at  the  time  the  com- 
pany was  created  ;  under  its  charter  the  company  erected 
its  works  and  carried  on  its  business  for  many  years;  and 
yet  the  charter  of  the  company  was  practically  repealed 
by  a  law  forbidding  the  manufacture  in  which  the  com- 
pany was  engaged. 

Fertilizing  Co.  vs.  Hyde  Park''  is  another  interesting 
case,  the  necessity  which  called  for  an  extreme  exercise 
of  the  police  power,  being  different  from  the  necessity  in 
the  previous  case.  In  1867  an  act  of  Illinois  was  passed 
for  in3orporating  the  Northwestern  Fertilizing  Co.,  giving 
it  continued  succession  for  50  years  and  authorizing  it  to 
establish  and  maintain  in  a  certain  part  of  Cook  county 
factories  for  making  an  agricultural  fertilizer  from  dead 
animals,  &c.  The  company  was  organized  as  provided 
by  its  charter,  and  located  its  works  within  the  territory 
allowed  by  the  act.  When  the  factories  were  built  the 
country  around  them  was  swampy  and  nearly  uninhab- 
ited, giving  little  promise  of  further  improvement.  After 
awhile,  however,  the  town  of  Hyde  Park  grew  up  around 
the  works,  which  then  become  an  unendurable  nuisance 
to  the  people  living  within  many  miles  of  them.  The 
charter  of  Hyde  Park,  as  revised  by  the  legislature  in 
1869,  gave  to  its  trustees  the  authority  to  "define  or  abate 
nuisances  which  are,  or  may  be,  injurious  to  the  public 
health."  In  pursuance  of  this  power,  the  municipality 
passed  an  ordinance  which  declared  that  no  person 
should  transport  any  ofFal  or  other  offensive  or  unwhole- 

1  Mualer  V.  Kansas,  S.  C.  of  U.  S.,  Oct.  Term,  1887,  No.  19. 

2  97  U.  S.  659. 


54 

some  matter  through  the  village,  or  maintain  or  carry  on 
any  offensive  or  unwholesome  business  or  establishment 
within  the  limits  of  the  village,  or  within  one  mile  of  its 
limits. 

The  constitutionality  of  this  ordinance,  as  applied  to 
the  Northwestern  Fertilizing  Co.,  was  before  the  Court  in 
this  case.  The  Court  upheld  the  ordinance,  saying  that 
although  the  charter,  ujitil  revoked,  was  a  sufficient  li- 
cense for  the  manufacturing  of  the  company,  yet  it  was 
not  a  contract  guaranteeing  that  the  company,  notwith- 
standing its  business  might  become  a  nuisance  by  reason 
of  the  growth  of  population  around  the  place  originally 
selected  for  its  works,  should  for  50  years  be  exempt  from 
the  exercise  of  the  police  power  of  the  state,  and  that  its 
charter  affords  the  company  no  protection  from  the  en- 
forcement of  the  ordinance.  "  That  a  nuisance,"  says  the 
Court,  "oi  a  flagrant  character  existed,  as  found  by  the 
Court  below,  is  not  controverted.  We  can  not  doubt  that 
the  police  power  of  the  State  was  applicable  and  adequate 
to  give  an  effectual  remedy.  It  extends  to  the  entire 
property  within  their  (the  separate  States)  jurisdiction. 
To  regulate  and  abate  nuisances  is  one  of  its  ordinary 
functions." 

In  Stone  vs.  Mississippi^  it  was  decided  that  to  preserve 
the  public  morals  the  State  can  carry  the  exercise  of  its 
police  power  to  an  extreme  length,  by  practically  repeal- 
ing the  charter  of  a  corporation,  as  we  have  already  seen 
it  can  do  when  the  public  health  demands  such  action.^ 
In  this  case  the  validity  of  that  part  of  the  constitution  of 
Missisippi,  which  declares:  "nor  shall  any  lottery  hereto- 
fore authorized,  be  permitted  to  be  drawn,  or  tickets 
therein  to  be  sold,"  as  appliedto  corporations  already  in 
existence,  was  considered  by  the  Court.  The  plaintiff 
was  a  corporation  organized  as  a  lottery  company  before 

1  101  U.  S.  814. 

A  I  suppose  that  prohibitory  laws  are  for  the  preservation  of  morals 
as  well  as  health  and  safety,  so  this  question  was  settled  before  this 
case  arose. 


55 

the  constitution  was  made,  and  had  complied  with  all  the 
conditions  imposed  upon  it.  Here,  as  in  the  case  of  pro- 
hibitory laws,  the  constitutionality  of  similar  legislation, 
as  applied  to  individuals,  had  been  previously  decided,^ 
so  that  the  chief  question  was  whether  the  corporation's 
charter  exempted  it  from  the  law.  The  previous  cases  set- 
tled unquestionably  what  the  answer  to  this  question 
would  be  and  the  court  in  holding  the  constitution  valid 
said:  p.  819,  "  The  question  is  therefore  directly  presented, 
whether,  in  view  of  these  facts,  the  legislature  of  a  State 
can,  by  the  charter  of  a  lottery  company,  defeat  the  will 
of  the  people,  authoritatively  expressed,  in  relation  to  the 
further  continuance  of  such  business  in  their  midst.  We 
think  it  cannot.  The  people,  in  their  sovereign  capacity, 
have  established  their  agencies  for  the  preservation  of 
the  public  health  and  the  public  morals,  and  the  protec- 
tion of  public  and  private  rights.  These  several  agencies 
can  govern  according  to  their  discretion,  if  within  the  scope 
of  their  general  authority,  while  in  power  ;  but  they  can- 
not give  away  or  sell  the  discretion  of  those  that  are  to 
come  after  them,  in  respect  to  matters,  the  government  of 
which,  from  the  very  nature  of  things,  must  vary  with 
varying  circumstances."^ 

Finally  came  the  case  of  Butchers  Union  Slaughter- 
House  and  Live  Stock  Landing  Co.  vs.  Crescent  City 
Live  Stock  Landing  and  Slaughier-House  Co.^  decided  in 
1884.  The  legislature  of  Louisiana,  in  the  exercise  of  its 
police  power,  granted  a  monopoly  in  the  butchering  trade 
to  the  appellee,  extending  over  a  large  extent  of  territory, 
including  New  Orleans.  In  1881  themunicij)al  authori- 
ties of  that  city,  under  authority  granted  by  tlie  Consti- 
tution of  Louisiana,  gave  certain  privileges  to  the  appe- 
lants  for  stock-landing  and  slaughter-houses,  at  variance 

iBoyd  V.  Alabama,  91  U.  S.,  645. 

2  See  also  Moore  v.  State,  48  Miss.  148  ;  Contra.  Broadbent  v.  T.  S. 

&  A.  Asso'u,  45  Ala.  172. 

3  111  U.  S.  74G. 

*  See  Slaughter- House  Cases,  16  Wallace  36. 


56 

with  the  exclusive  privileges  previously  granted  to  the 
appellee. 

The  case  was  in  most  respects  exactly  similar  to  New 
Orleans  Gas  Co.  vs.  La.  Light  Co.,  previously  discussed. 
The  only  difference  between  them  was  in  the  character 
of  the  business  of  the  two  corporations  to  which  exclusive 
privileges  had  been  granted.  The  business  of  the 
Slaughter-House  Co.  was  necessarily  detrimental  to  public 
health  in  whatever  manner  conducted.^  In  the  case  of 
the  Gas  Light  Co.  this  was  not  so,  and  the  exclusive  grant 
to  it  was  sustained,  as  so  doing  did  not  obstruct  the  State 
in  the  exercise  of  her  power  to  provide  for  the  public 
health.' 

But  the  exclusive  grant  to  the  Slaughter-House  Co.  was 
not  sustained  ;  the  Supreme  Court  holding  that,  as  the 
State  could  grant  exclusive  privileges  to  a  company  in 
the  exercise  of  its  police  power,  so  it  could  also  withdraw 
them  in  the  exercise  of  the  same  power  whenever  the 
public  health  demanded  such  action. 

CHAPTER  X. 

These  cases  show  that  a  State  has  practically  unlimited 
control  uver  corporations,  in  the  exercise  of  its  police 
power,  when  the  public  health  or  morals  call  for  such 
control. 

There  is,  however,  one  limitation  placed  upon  a  State 
in  the  exercise  of  this  power  ;  not,  indeed,  as  to  when  or 
for  what  purposes  the  State  shall  exercise  it,  but  as  to  the 
capacity  in  which  it  shall  exercise  it.  The  Constitution  of 
Louisiana  granted  a  charter  to  a  lottery  company — or 
rather,  revived  a  previous  charter  which  had  expired — 
and  the  question  arose  whether  a  company,  incorporated 
in  this  way,  whose  charter  was  contained  in  the  Consti- 
tution of  a  State,  was  subject  to  the  police  control  of  the 
State,  acting  through  its  Legislature,  even  where  the  pub- 
lic morals  were  concerned.     The  Court  held  that  it  was 

*  N.  O.  Gas  Co.  V.  La.  Light  Co.,  115  U.  S.  650,  669. 
5  115  U.  S.  672. 


51 

not,  saying:  "  It  is  undoubtedly  true  that  no  rights  of 
contract  are,  or  can  be,  vested  under  this  constitutional 
provision  which  a  subsequent  Constitution  might  not 
destroy  without  impairing  the  obligation  of  a  contract, 
•within  the  sense  of  the  Constitution  of  the  United  States 
for  the  reason  assigned  in  Stone  vs.  Mississippi.  But  an 
ordinary  act  of  Legislature  cannot  have  that  effect,  be- 
cause the  constitutional  provision  has  withdrawn  from 
the  scope  of  the  police  power  of  the  State,  to  be  exercised 
by  the  General  Assembly,  the  subject  matter  of  the  grant- 
ing of  lottery  charters,  so  far  as  the  Louisiana  State  Lot- 
tery Company  is  concerned.^ "  Therefore  when  a  State,  in 
its  Constitution,  grants  a  charter  to  a  corporation,  it  looses 
all  control  over  the  corporation  except  when  acting  under 
the  same  or  another  Constitution.^ 

CHAPTER   XL 

In  many  of  the  cases  examined  the  charters  of  the  cor- 
porations have  been  subject  to  amendment,  alteration,  or 
repeal  at  the  pleasure  of  the  State  legislature.  The  de- 
•cision  in  the  Dartmouth  College  case  made  it  necessary 
for  the  State  to  reserve  this  power  to  itself  if  it  desired  to 
control  the  corporation  in  the  future ;  under  many  cir- 
cumstances, at  any  rate.  The  effect  that  this  provision 
has  upon  the  police  control  of  the  corporation  by  the 
■State  is  an  important  question.  It  is  extremely  difficult 
to  say  just  what  the  effect  is,  and  the  numerous  cases 
cannot  all  be  placed  on  the  one  side  or  the  other  of  any 
•clearly  drawn  line.  Apparently  such  a  provision  does 
not  give  the  Legislature  power  to  alter,  amend,  or  repeal 

1  New  Orleans  v.  Houston,  119,  U.  S.  265. 

^  The  limitation  upon  the  police  power  of  a  State,  spoken  of  in  this 
■case,  is  not  imposed  by  Article  1,  Section  10  of  the  Constitution  of 
the  United  States,  but  is  the  result  of  the  relation  between  the  Con- 
stitution of  a  State  and  laws  passed  by  its  Legislature.  The  case  is, 
however,  a  very  interesting  one  to  consider  in  connection  with  the 
■cases  just  discussed. 


58 

charters  at  its  pleasure,  as  on  its  face  it  purports  to  do. 
Just  as  we  have  seen  that  a  State  can  control  a  corpora- 
tion under  certain  circumstances,  in  spite  of  the  fact  that 
the  charter  of  the  corporation  is  a  contract,  and  as  such 
protected  by  the  Constitution  of  the  United  States;  so,  on 
the  other  hand,  the  corporation,  after  the  State  has  once 
given  it  being,  has  certain  rights  which  it  is  beyond  the 
power  of  the  Legislature  to  retract,  although  it  has  ex- 
pressly reserved  to  itself  the  power  to  alter,  amend,  or 
repeal  the  charter  of  the  corporation.  "  The  reservation 
is  to  be  interpreted  as  placing  the  State  Legislature  back 
on  the  same  platform  of  power  and  control  over  the  char- 
ter containing  it  as  it  would  have  occupied  had  the  consti- 
tutional restrictions  about  contracts  never  existed  ;  and  I 
think  the  reservation  effects  nothing  more.'" 

Perhaps  as  good  an  illustration  of  the  power  this  pro- 
vision gives  the  Legislature  as  can  be  found,  is  furnished 
by  some  statutes  imposing  taxes  on  corporations.  We 
saw  that  where  the  charter  of  the  corporation  said  noth- 
ing in  regard  to  taxes,  the  State  could  tax  the  corpora- 
tion as  it  could  the  individual.^  But  where  the  charter 
contains  a  definite  provision  as  to  taxation,  or  exempts 
the  corporation  from  taxes,  the  State  cannot  then  tax  the 
corporation,  except  as  provided  by  its  charter.^  Where, 
however,  the  charter  of  a  railroad  company  exempted  it 
from  taxation,  but  was  subject  to  repeal  or  alteration,  the 
legislature  by  virtue  of  the  latter  provision,  could  tax  the 
corporation,  in  spite  of  the  exemption.'' 

Whether  such  a  power  of  alteration  or  repeal  reserved 
to  the  legislature,  would  be  held  to  enable  it  to  act  at 
variance  with  an  express  provision  in  the  charter  of  a 
corporation  in  the  matter  of  regulating  charges,  as  it  was 

1  Dissenting  opinion  of  Bradley,  J,  in  Sinking  Fund  Cases  99  U.  S. 
7C0,  748. 

^  Providence  Bank  v.  Billings,  4  Peters,  514. 

'  Bank  of  Ohio  ».  Knopp,  3  Wall.  51  ;  Home  for  the  Friendless  v. 
Rouse,  8  Willi.  430. 

*  Tomilson  z'.  .Jessup,  15  Wall.   459. 


59 

held  to  do  in  the  matter  of  taxation,  has  not,  I  believe, 
been  actually  settled.  It  seems,  however,  that  the  rule 
which  was  applied  to  the  power  of  a  State  in  regard  to 
to  taxation,  would  also  be  applied  in  regard  to  regulating 
the  charges  of  corporations,  and  that  by  virtue  of  this 
reserved  power,  a  State  could  regulate  the  charges  of  a 
corporation  in  spite  of  any  provision  contained  in  the 
charter  of  the  latter/ 

Whether  the  court  would  have  decided  the  Binghamp- 
ton  Bridge  Case  (supra)  differently,  had  the  charter  of  the 
first  company  been  subject  to  repeal  or  alteration,  is  a 
difficult  question.  In  Tomilson  vs.  Jessup  (supra)  the 
change  in  the  charter  of  the  corporation,  did  not  render 
its  franchise  valueless,  though  it  lessened  its  value ;  but 
to  have  decided  the  Binghampton  Bridge  Case  differently 
would  have  practically  destroyed  the  value  of  the  fran- 
chise of  the  first  company,  and  would  not  have  been  in 
keeping  with  the  decision  in  Commonwealth  vs.  Essex, 
it  seems  to  me. 

As  to  the  alterations  which  a  State  can  make  in  the 
charter  of  a  company  under  this  reserved  power,  Mr. 
Justice  Swayne  says  :^  "  *  *  *  they  must  be 
made  in  good  faith,  and  be  consistent  with  the  object  and 
scope  of  the  act  of  incorporation.  Sheer  oppression  and 
wrong  cannot  be  inflicted  under  the  the  guise  of  amend- 
ment or  alteration." 

"  Vested  rights,  it  is  conceded,  cannot  be  destroyed  or 
impaired  under  such  a  reserved  power,  but  it  is  clear  that 
the  power  may  be  exercised,  and  to  almost  any  extent, 
to  carry  into  effect  the  original  purposes  of  the  grant,  and 
to  protect  the  rights  of  the  public,  and  of  the  corporators, 
or  to  promote  the  due  administration  of  the  affairs  of  the 

^  Tiedman  Liniitatious  to  Police  Power,  p.  588,  dissenting  opinion 
of  Bradley,  J.  in  Siukinjj  Fund  Cases,  99  U.  S.  700,  749;  assenting 
opinion  of  Harlan,  J.  in  Ruggles  v.  111.  108  U.  S.  526,  537. 

2  13  Gray,  249. 

3  Shields  v.  Ohio,  95  U.  S.  324. 


60 

corporation."^  In  Railroad  Co.  vs.  Mains'*  it  was  held 
that  "  the  existence  of  the  Corporation,  and  its  franchises 
and  immunities,  derived  directly  from  the  State,  were 
thus  kept  under  its  control,"  but  that  "  rights  and  inter- 
ests acquired  by  the  company,  not  constituting  a  part  of 
the  contract  of  incorporation,  stand  upon  a  different  foot- 
ing." The  State  cannot  under  this  reserved  power  pass 
a  law  imposing  a  serious  burden  upon  a  corporation,^  nor 
one  taking  away  from  it  one  of  its  sources  of  income.^ 
*'  There  is  no  well  considered  case,"  says  Cooley,  J.,'*  "  in 
which  it  has  been  held  that  a  legislature,  under  its  power 
to  amend  a  charter,  might  take  from  the  corporation  any 
of  its  substantial  property  or  property  rights."' 

But  this  power  of  alteration  and  repeal  reserved  to  the 
legislature  is  not  so  important  in  connection  with  the  po- 
lice power  of  the  State,  as  at  first  it  might  seem  to  be. 
The  statute  held  unconstitutional  in  Miller  vs.  R.  R.  Co 
(supra)  imposed  no  more  weighty  burden  upon  the  cor- 
poration than  did  many  of  the  statutes  held  valid  in 
Thorpe  vs.  R.  R.  Co.  (supra)  and  similar  cases,  and  we 
have  seen  that  in  those  cases  the  statutes  were  held  valid 
whether  or  not  the  Legislature  reserved  to'itself  the  power 
to  alter  or  repeal  the  charters  of  the  corporations.  It 
seems,  then,  that  although  this  reserved  power  will  not 
enable  the  Legislature  to  impose  fresh  burdens  upon  a 
corporation,  its  police  power,  when  exercised  for  the  pub- 
lic safety'*^  will  enable  it  to  do  so,  or  even  enable  it  to  alter 

1  Opinion  of  Ct.  in  Holyoke  Co.  v.  Lyman,  15  Wall.    500. 

2  96  U.S.  499. 

3  Miller  v.  N.  Y.  &  Erie  R.  R.  Co.  21,  Barb.  513. 

*  Detroit  v.  Detroit  &  Howell  Plank  Road  Co.  43  Micb.  140. 

*  See  also  Commonwealth  v.  Essex,  13  Gray,  248, 

*■  In  Miller  v.  R.  R.  Co.  tbe  Court  said  in  regard  to  tbe  attempted 
regulations:  "If  such  arrangements  were  necessary  for  tbe  safety  of 
tbe  passengers  .  .  .  they  migbt  be  doubtless  required  of  tbe 
Companies,     ..." 


61 

or  repeal  the  charter.^  Therefore,  in  considering  statutes 
passed  for  the  protection  of  the  public  health  or  safety 
which  impose  fresh  burdens  on  a  corporation,  or  perhaps 
repeal  its  charter,  the  fact  that  the  Legislature  did  or  did 
not  reserve  to  itself  the  power  to  alter  or  repeal  the  char- 
ter of  a  corporation,  need  not  be  taken  into  considera- 
tion. The  same  is  true  in  considering  statutes  passed  to 
protect  public  morals.'' 

Whsn,  however,  the  State,  acting  to  protect  neither  the 
public  safety,  health,  or  morals,  imposes  fresh  burdens  on 
a  Corporation,  or  limits  its  powers  in  any  way,  this  re- 
served power  may  become  an  important  factor  in  con- 
sidering the  statute,  as  the  Pennsylvania  Court  held.' 

It  may  also  be  decided  hereafter  that  this  reserved 
power  enables  the  State  to  regulate  the  charges  of  a  cor- 
poration, and  control  it  in  other  respects,  in  spite  of  ex- 
press provisions  in  the  charter  of  the  corporation,  ex- 
empting it  from  such  regulation.  (See  the  cases  on  tax- 
ation cited  above.) 

CHAPTER  XII. 

From  an  examination  of  the  cases  discussed  it  is  evi- 
dent that  the  police  power  of  a  State  has  a  very  wide 
range ;  that  in  the  exercise  of  it  a  State  can  legislate  in 
regard  to  a  large  number  of  subjects,  and  for  a  large 
number  of  purposes.  It  is  primarily  exercised  to  guard 
the  public  health,  safety,  and  morals ;  but  it  is  also  ex- 
ercised to  guard  the  public  purse  from  undue  charges 
levied  by  persons  whose  business  has  become  a  practical 
monopoly,  and  for  other  purposes.  A  general  division 
of  the  statutes  passed  in  the  exercise  of  this  power  would 

^  Coates  V.  Mayor  &c.,  of  N.  Y.  supra  ;  See  also  Opinion  of  Ct.  in 
Beer  Co.  v.  Mass.  97  U.  S.  25. 

*  Stoue  V.  Mississippi's,  supra. 

^Monongahela  Na,v.  Co,  v.  Coon,  Penna  R.  R.  Co.  v.  Duncan  supra. 


62 

be  into  those  passed  to  protect  the  public  health,  safety, 
and  morals  ;  and  those  passed  for  any  other  purpose. 

In  deciding  what  the  effect  of  the  clause  in  the  Consti- 
tution, which  forbids  a  State  to  pass  a  law  impairing  the 
obligation  of  a  contract,  is  upon  the  police  control  of  a 
State  over  a  corporation,  it  must  first  be  remembered  that 
a  remedy  a  corporation  may  have  against  those  who  deal 
with  it,  or  that  those  who  deal  with  a  corporation  may 
have  against  it,  is  no  part  of  its  corporate  franchise,  and 
is  within  legislative  control,  provided  the  legislation  is 
reasonable.  The  division  just  made  of  the  statutes, 
passed  in  the  exercise  of  the  police  power,  into  two  classes, 
must  also  be  borne  in  mind,  and  the  need  which  called 
for  any  given  act  of  legislature  must  be  considered  no  less 
than  the  character  of  the  act  itself.  An  act  which  would 
be  held  unconstitutional  when  passed  for  a  certain  pur- 
pose, might  still  be  held  constitutional  when  passed  to 
accomplish  some  different  purpose,  as  the  Louisiana 
Monopoly  Cases  show  so  beautifull3^ 

When  a  State,  in  the  exercise  of  its  police  power,  passes 
a  law  in  regard  to  a  corporation,  for  other  purposes  than 
the  protection  of  the  public  health,  safety,  or  morals,  the 
provisions  contained  in  the  charter  of  the  corporation,  and 
the  fact  that  the  legislature  did  or  did  not  reserve  to  it- 
self the  power  to  alter  or  repeal  the  charter,  must  be 
taken  into  consideration,  as  explained  above.  For  the 
most  part,  with  certain  exceptions  in  the  State  courts, 
the  doctrine  laid  dowd  in  Providence  Bank  vs.  Billings 
(supra)  has  been  followed,  and  regulations  that  would  be 
constitutional  when  applied  to  individuals,  have  been 
held  to  apply  to  corporations,  unless  the  charter  of  the 
corporation  exempts  it  from  such  regulations.  A  State 
cannot,  however,  except  when  legislating  to  protect  the 
public  health,  safety,  or  morals,  violate  an  express  pro- 
vision in  the  charter  of  a  corporation,  unless  it  has  re- 
served to  itself  the  power  to  alter,  amend,  or  repeal  the 
charter.  The  fact  that  the  State  may  have  acted  indis- 
creetly in  making  the  contract  does  not  influence  the  case 


63 

at  all.  If  the  contract  is  made  in  express  terms,  the 
State  is  bound  by  it/ 

But,  when  the  public  safety,  health,  or  morals,  demand 
protection,  the  State  has  absolute  control  over  a  corpora- 
tion, subject  to  the  single  limitation  explained  above, 
that  under  certain  circumstances  the  State  can  act  only 
through  its  Constitution,  whether  or  not  it  reserved  to  it- 
self the  power  to  alter  or  repeal  the  charter  of  the  corpo- 
ration, and  even  thougli  such  control  is  at  variance  with 
an  express  provision  of  the  corporotion's  charter,  or  prac- 
tically repeals  it.  "While  we  are  not  prepared  to  say 
that  the  Legislature  can  make  valid  contracts  on  no  sub- 
ject embraced  in  the  largest  definition  of  police  power, 
we  think  that,  in  regard  to  two  subjects  so  embraced,  it 
cannot,  by  any  contract,  limit  the  exercise  of  those  powers 
to  the  prejudice  of  the  general  welfare.  These  are  the 
public  health  and  the  public  morals.  The  preservation 
of  these  is  so  necessary  to  the  best  interests  of  social  or- 
ganization that  a  wise  policy  forbids  the  legislative  body 
to  divest  itself  of  the  power  to  enact  laws  for  the  preser- 
vation of  health  and  the  repression  of  crime."" 

Every  contract,  therefore,  between  a  State  and  a  cor- 
poration, created  by  the  grant  of  its  charter  to  the  latter 
by  the  former,  is  made  upon  the  implied  condition  that 
the  State  reserves  to  itself  the  power  to  legislate  for  the 
public  health  and  morals ;  and  for  the  purpose  of  guard- 
ing the  public  health  or  protecting  the  public  morals, 
the  State  can  enact  any  laws  in  regard  to  the  corporation, 
which  would  be  constitutional  if  applied  to  an  individ- 
ual, in  spite  of  the  fact  that  the  charter  of  the  corpora- 
tion is  a  contract,  and  that  the  Constitution  of  the  United 
States  forbids  any  State  to  pass  a  law  impairing  the  obli- 
gation of  contracts. 


iBingliatnpton  Bridge  Co.,  3   Wall.   51;  New   Orleans   Gas  Co.   v. 
La.  Light  Co.  115  U.  S.  650. 

2  Opinion  of  Ct.  delivered  by   Miller,    J.    in   Butchers,    etc.  Co.  v. 
Crescent  City,  etc.  Co.  Ill  U.  S.  746. 


INDEX. 


Alter.  ''•'«*• 

See  Amend. 
Amend. 

The  eflfect  of  reserving   to  a  State  the  power  to  alter, 

amend,  or  repeal  a  charter, 57,61 

Bridg^e. 

A  canal  company  cannot  be  compelled  to  build  bridges 
over  its  canal  at  public  roads, 45 

Burden. 

A  State  cannot  impose  fresh  burdens  on  a  corporation,  45 

New  burdens  can  be  imposed  on  corporations   to  force 

them  to  perform  their  duties, 27 

See  Safety.    Also  Corporation  and  Convenience. 

Burying-  Ground. 

Police  control  over, 50-52 

Can  be  moved  from  cities, 51-52 

Cattle  Guard. 
See  Railroad. 

Change. 

See  Remedy. 

Charges. 

Rights  of  a  State  to  regulate. 

As  to  individuals, 39 

As  to  corporations. — Railroad  companies,      .         .         .  39-43 

Gas  companies,    .........  45 

Telephone  companies,     .......  45 

Water  vporks  companies, 45 

Ferry  companies,      ........  45 

Where  a  State  reserves  power  to  alter,  amend,  or  repeal 
a  charter, 58-59 

Charter. 

Inviolability  of, 21 

See  Corporation. 

Commerce. 

See  Inter-State  Commerce. 
Commissioners. 

May  be  appointed  to  oversee  banks,           ....  26 

To  oversee  railroads, 40 

65 


06 

Page. 

Condition. 

A  corporation  may  bo  compelled  to  fulfill  the  conditions, 
expressed  or  implied,  on  which  it  holds  its  charter,  .  26 

Convenience. 

Care  for  public  convenience  justifies  a  State  in  imposing 

fresh  burdeus^on  a  corp -ration, 35 

Consequential  Injuries. 

Liability  of  a  corporation  for,  o6 

Constitution  of  the  United  States. 

Article  I,  Section  10  of,  Its  application  to  corporations,  21 

Contract. 

See  Corporation,  and  also  Impair. 

Corporation. 

Charter  of  is  a  contract,      .......  21 

Views  as  to  power  of  a  State  to  control,         .         .         .  24-26 

Not  exempt  from  burdens  common  to  in<lividuals,  .  24 

Damag^es. 

For  cattle  killed  by  a  railroad, 31 

For  death  of  a  person  killed  by  negligence  of  a   railroad 

company,  ....,.-...  34 

For  consequential  injuries.     See  Consequential. 

Dartmouth  College  Case. 

Principle  of,      ........         .  21 

Death. 

See  Damages, 

Diligence. 

Railroad  companies  must  exercise,  in  keeping  up   fences 

along  their  tracks,   ........  32 

Eminent  Domain. 

Exercise  of  right  of  by  a  State, 49 

Exclusive  Privileges. 

When  expressed  in  a  charter,  a  State  cannot  violate,       .      47-50 
Express  Provision. 

"When  contained  in  a  charter  a  State  cannot  violate,         41,  47-50 

Fence. 

See  Railroad. 

Fines. 

Imposed  on  railroad  companies  for  negligence.     ,        ,  35 

Fishways. 

Power  of  a  State  to  compel  a  corporation  to  put  fishways 

in  its  dams, 45,  46 


67 

Page. 

Forfeiture. 

A  corporation  may  be  compelled  to  suspend  or  to  forfeit 

its  charter,  if  it  does  not  perform  its  duties,       .  26 

Franchise. 

Riglit  to  supply  a  municipality  with  gas  is  one,       .         .  50 

See  Remedy. 

Health. 

See  Public. 
ImmigTation. 

Right  of  a  State  to  regulate  in  the  exercise  of  its  police 

power, 21 

Impair. 

A  State  cannot  pass  a  law  impairing  the   obligation  of 

contracts, 21 

Individual. 

See  Corporation. 
Injuries. 

See  Consequential. 
Inter-state  Commerce. 

Cannot  be  regulated  by  a  State, 41 

Liability. 

Of  a  Railroad  Company. 

For  cattle  killed, 31 

For  death  of  a  person  killed  through  negligence,  .  34 

For  consequential  injuries  to  property 36 

liimit. 

To  change  in  remedy  against  a  corporation,  .         ,  28 

Limitation. 

On  the  police  power  of  a  State 56-57 

Lottery. 

Power  of  a  State  to  prohibit. 

As  to  Individuals, 54 

As  to  Corporations, 54,  55 

Monopoly. 

State  can  grant  in  the  exercise  of  its  police  power,     .       47  50,  55 
Can  repeal  in  the  exercise  of  the  same  power,       .        .  55 

Can  regulate  charges  of    ' 3ft 

Morals. 

See  Public. 

Nuisance. 

Power  of  a  State  to  abate, 53 

Obligation. 
See  Impair. 


68 

Page. 

Penalty. 

Wheu  an  additional  one  can  be  imposed,  .        .        .         .      27,  31 

Pennsylvania. 

Law  as  to  fences  along  railroad  tracks  iu,      ...  32 

Pilot. 

Right  of  a  State  to  pass  Pilot  and  Quarantine  Laws  in 
the  exercise  of  its  police  power,     .....  21 

Plank  Road 

And  Turnpike  Companies.— Control  over,      ...  43 

Police  Power. 

Classification  of  Statutes  passed  in  the  exercise  of           .  61 

Definition  of, 17-20 

Examples  of,        .........  19,  20 

Control  of  a  State  over  corporations  in  the  exercise  of  26 

Exercise  of  in  extreme  cases,           .....  50-56 

A  State  cannot  part  with, 22,  63 

Precautionary  Measures. 
See  Railroad. 

Privileg-es. 

Are  not  to  be  implied  from  the  charter  of  a  corporation,  34 

Prohibitory  Laws. 

Power  of  a  State  to  pass, 19 

As  applied  to  individuals,           ......  52 

As  applied  to  coiporations, 52,  53 

Providence  Bank  v.  Billings. 

Principle  of, 24 

Provision. 

See  Express. 
Public   Health. 

Power  of  a  State  over  a  corporation  in  protection  of,  50-56 

Public  Morals. 

Power  of  a  State  over  a  corporation  in  protection  of,  .  52-55 
Public  Safety. 

Power  of  a  State  over  a  corporation  in  protection  of,     .  35 

Quarantine. 

See  Pilot. 

Railroad. 

Police  control  over,     ....         ....  28-44 

State  can  compel  a  Railroad  to  fence  its  tracks,          .  29,  30 

Railroad  cannot  escape  from  this  duty,      ....  liS 

To  maintain  cattle  guards, 29,  30 

To  take  other  precautionary  measures  demanded  by  pub- 
lic safety, 30 


69 

TT     J  1  .  ^*^*'- 

Under  what  circumstances  the  railroads  can  be  compell- 
ed to  take  precautionary  measures,  ....  33 
See  also  Charges  and  Damages  and  Pines. 
Regulate. 

See  Charge. 

Regulations. 

Demanded  by  Public  Health,  Morals,  or  Safety. 

See  Public. 

Not  demanded  by  Public  He9,lth,  Morals,  or  Safety,         .       40-43 
Remedy. 

Exercised  by  or  against  a  corporation  is  not  part  of  its 
franchise.     It  is  within  legislative  control,  and  can  be 

clianged 25-28 

Repeal. 

See  Amend. 
Reserve. 

See  Amend. 
Safety. 

Care  for  public  safety  justifies  a  State  in  imposing  fresh 
burdens  on  a  corporation, 35 

See  Public. 

Sic  utere  tuo  ut  alienum  non  laedas. 

Doctrine  of,      .         . jg 

Slaugh  ter-House. 

Power  of  a  State  to  control, 55   56 

Slaves. 

Right  of  a  State  to  keep  from  its  borders  in  the  exercise 

of  its  police  powers 20 

Suspend. 

See  Forfeiture. 
Tax. 

Power  of  a  State  to  tax  a  corporation,  ...  58 

Toll-gates. 

A  State  cannot  remove, 43 

Vested  Rights. 

Cannot  be  destroyed   under  power  to  alter,  amead  or 
repeal  a  charter, 59 


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